Friday, May 20,
CIL showed resistance on Power ministry’s stand on curbing e -auctioning of coal. NC Jha, Chairman of the company said that e-auctions of coal should continue. He informed that e-auction has approval of the Supreme Court.*
Previously Planning commission had said that 10% of coal, which is e-auctioned by CIL, should be eliminated. A senior power ministry official said, “The power ministry feels that Coal India should honor commitment to supply quantities agreed under letters of assurance for new units commissioned during 2009-12 before resorting to e-auction of thermal coal.” Coal supply to the power sector increased 7% during the period 2007-08 to 2009-10, while the quantity of coal sold through e-auctions increased over 90% during the same period, he added.CIL should adopt pool pricing for thermal coal and should plan for import of coal.
Jha, however, said there was no dearth of coal for the power sector and that producers were not utilizing the entire quantity earmarked for them. He said power producers evacuated only 304 million tonne of the allotted 335 million tonne in 2010-11 due to lack of proper transportation facilities.
However, Industry experts believe that prohibiting e-auctions is not an easy exercise .As per their opinion in a worst-case scenario, coal will be selling at FSA (Fuel supply agreement) prices.
N C Jha also said that if any change in the policy of e-auctions will take place in future then dispatching of large quantity of coal is not possible reason being there is no infrastructure for handling that additional coal. That infrastructure exists only in road. By road, you cannot transport coal to 1,000 kms or 700 kms.
Power stations are located at far off distances. The supply of auctioned coal is generally made in the surrounding areas of industries and some portion moves to distances for which only 20% coal goes through the e-auction route under rail.
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