Centre Replaces Sector Specific Auction By Coal Companies With Common Window

Bhubaneswar: The Centre on Saturday replaced the present system of sector specific auctions of coal by the companies with a common e-auction window.

The meeting of Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved the offering of all the non-linkage coal by coal companies through one e-auction window of Coal India Limited (CIL)/Singareni Collieries Company Limited (SCCL). This e-auction will cater to all sectors including power and Non Regulated Sector (NRS). Now, coal would be offered through this auction.

Long term allotment of coal by CIL/SCCL, without affecting the supplies against existing coal linkages, to their own gasification plants will be allowed at prices decided by the coal company. However, the taxes, duties and royalty will be paid by the companies.

The coal offered through the single e-auction window will be on transport mode with default option of railways. However, coal may be lifted by the consumers through the road or other modes without paying additional charges or discount to the coal companies.

The e-auction will be subject to CIL/SCCL meeting the coal linkage requirements against existing linkages and do not affect the current linkages to power and non-power consumers at contracted prices.

The common e-auction window aims at removing market distortions and evolving single rate for all consumers. It will also increase operational efficiencies and lead to an increase in domestic coal demand in domestic market.

It will eliminate the present discretion vested in coal companies of allocating coal to different end use sectors. Besides, the coal companies can establish coal gasification plants by availing coal from their own mines.

Since the CIL has an ambitious plan of producing 1 billion tonne coal by 2023-24, better availability of domestic coal with better price stability and predictability will bring down the coal import.  This would reduce the dependence on imported coal and help Atmanirbhar Bharat.