The Cabinet Committee has approved that the offering of all the “non-linkage coal by coal companies” shall be held through single e-auction window of CIL (CIL) / Singareni Collieries Company Limited (SCCL). This will cater to power sector as well as non-regulated sectors such as traders and coal would be offered through this auction in place of the present system of sector-specific auctions. The committee was chaired by Prime Minister Narendra Modi.
The functioning of this will be subject to CIL/SCCL meeting the coal linkage requirements against existing linkages.
Long-term allotment of coal by CIL/SCCL, without affecting the supplies against existing coal linkages, to their own gasification plants shall 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 the power sector.
The decision was made with an aim to remove market distortions and ensure uniform rate for all consumers. It shall increase operational efficiencies and lead to an increase in domestic coal demand by efficiency in the domestic coal market. Besides the discretion presently vested in coal companies of allocating coal to different end-use sectors will be eliminated. Further, the coal companies shall 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.
However, the government claimed in a statement that the clubbing of the e-auction windows would not involve any additional cost to the coal companies.