Cabinet Okays Coal Supply Through E-Auction Route

Government on Saturday cleared supply of coal by companies including Coal India Limited (CIL) through a common e-auction window rather than sector-specific auctions.

The proposal was cleared by the cabinet committee on economic affairs (CCEA), which held its meeting earlier in the day.

In a statement, the coal ministry said CCEA has approved offering of all the non-linkage coal by coal companies through one e-auction window of CIL and Singareni Collieries Company Limited (SCCL). 

With this, market distortions would be removed and single rate for all the consumers will evolve in the e-auction market. It will increase operational efficiencies and lead to an increase in domestic coal demand, it added.

Apart from this, the discretion presently vested in coal companies for allocating coal to different end use sectors will be eliminated. Further, the coal companies will be able to establish coal gasification plants by availing coal from their own mines.

It shall help in developing clean coal technology in the country, it added.

This e-auction will cater to all the sectors, namely power sector and non regulated sector (NRS), including traders. Coal would be offered through this auction in place of the present system of sector specific auctions.

"The above will be subject to CIL or SCCL meeting the coal linkage requirements against existing linkages and do not impact the current linkages to power and non-power consumers at contracted prices," it said.

"Coal offered through the single e-auction window shall be transport mode agnostic with default option being through rail mode," it added.

However, coal may be lifted by the consumers through the road mode or other modes depending upon their choice and suitability without paying any additional charges or discount to the coal companies.

Long-term allotment of coal by CIL and SCCL, without affecting the supplies against existing coal linkages, to their own gasification plants will be allowed at prices as may be decided by the coal company.

However, the taxes, duties, royalty etc. shall be paid by the coal companies on the notified prices of coal for power sector.