Continuing the preventive measures to support the sluggish market, CIL has decided to drop the performance incentive (PI) for coal supplies to the power utilities.
The incentive was introduced as a mean of receiving additional payment when the seller (CIL) issues sales order for coal to the purchaser in excess of 90% in a particular year. However, in view of the large coal stock available at the power stations and financial hardship of the consumers, CIL has announced that it would waive off the incentive.
The miner has stated that the PI would be removed towards dispatches to the power utilities under FSAs during the first and second quarter of FY21 (Apr-Sep’20) across all subsidiaries.
This is not the first time CIL has offered relief to the consumers in the crucial period. Recently, the miner had scrapped upper cap imposed on the coal prices for various e-auctions and extended the Usance LC facility.
Besides, CIL has also approved extension of last date of payment for FSA/e-auction consumers up to 10 May’2020, in case where the deadline for payment had fallen within the lock-down period.
It is pertinent to note that power demand has went down during the lock-down period, thus forcing the power producers to raise their voice against additional supplies. As on 15 Apr’20, coal stock at the power plants (having linkages) has reached 49.38 MnT, which is enough to produce electricity for 29 days without needing any supply from CIL.
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