Coal link­ages for non-power sec­tors only through e-auc­tions

MOVE GETS CAB­I­NET PANEL NOD; PSUS WILL TAKE AUC­TION ROUTE FOR IN­CRE­MEN­TAL RE­QUIRE­MENT

Resource Digest - - CONTENT -

Coal link­ages, or long-term sup­ply of fuel to sec­tors such as steel, ce­ment, and alu­minium, will now be granted only through elec­tronic auc­tions. A de­ci­sion to this ef­fect was taken by the Cab­i­net Com­mit­tee on Eco­nomic Affairs. The auc­tion route will be fol­lowed for all fu­ture con­tracts, once the ex­ist­ing fuel sup­ply agree­ments (FSAS) lapse. For pub­lic sec­tor units, the ex­ist­ing FSAS will be re­newed, but if the re­quire­ment is be­yond FSA quan­tity, link­ages will hap­pen through the auc­tion route. For urea units, the FSA route will con­tinue.

Un­like the coal mine auc­tions, which were con­ducted by the Coal Min­istry, the fuel link­age will be auc­tioned by Coal In­dia Ltd and Sin­gareni Col­lieries Com­pany Ltd (SCCL).

“The process of grant­ing coal link­age was not fully trans­par­ent. There were sev­eral com­plaints about the process. The auc­tion will bring trans­parency and pro­vide equal op­por­tu­nity for all con­sumers,” said Piyush Goyal, Min­is­ter of State (In­de­pen­dent Charge) for Power, Coal and New & Re­new­able En­ergy.

Ac­cord­ing to an of­fi­cial state­ment, “Twenty-five per cent of in­cre­men­tal Coal In­dia Lim­ited (CIL) / Sin­gareni Col­lieries pro­duc­tion dur­ing 2015-16 will be put up for auc­tion.” The quan­tity will be ear­marked for each in­di­vid­ual sec­tor – ce­ment, sponge iron, steel, alu­minium and oth­ers.

“We have drawn out the sched­ule. In the next 7-10 days, the ex­er­cise to com­mence auc­tions will be­gin. By April-end, we should be able to hold auc­tions. In the first round, 24 mil­lion tonnes of coal could be put up for auc­tion. This would in­clude the quan­tity of the lapsed FSAS,” Coal Sec­re­tary Anil Swarup said.

The Coal Min­istry had been draw­ing up a plan for auc­tion­ing link­ages to the non-power sec­tor over 2015.

An In­ter-min­is­te­rial Com­mit­tee was con­sti­tuted in Jan­uary 2015 to vet var­i­ous struc­tures and mod­els for com­pet­i­tive bid­ding.

Till now, grant­ing of coal link­ages was gov­erned by the New Coal Dis­tri­bu­tion Pol­icy of Oc­to­ber 2007.

Re­quests for coal link­ages were for­warded to the ad­min­is­tra­tive min­istries for their rec­om­men­da­tions, which were then placed be­fore the Stand­ing Link­age Com­mit­tee. But, de­spite the pol­icy, no new link­age has been al­lot­ted to the non-power sec­tor since 2007, the state­ment added.

PIYUSH GOYAL, MIN­IS­TER OF STATE FOR POWER, COAL AND NEW AND RE­NEW­ABLE EN­ERGY (RIGHT), AND COAL SEC­RE­TARY ANIL SWARUP

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