Coal India Ltd has decided to continue with the dispensation of waiver of performance incentive for coal supplies to power utilities under FSA from 1 Oct ’20 to Dec ’20.
The miner had earlier withdrawn the incentive till Sep ’20 which was initiated along with removal of upper cap on notified price for coal auctions, in order to provide much needed financial relief to the customers.
While, the upper cap has been restored to 10% in case of auction, the CIL board approved to extend the relaxation on performance incentive for another three months.
This means that the power producers can avail coal supply in excess of 90% of ACQ (Annual Contracted Quantity) without having to pay additional amount in the form of performance incentive, which in turn would assist CIL in liquidating the surplus inventory.
After a period of sluggish demand, coal stock at power plants has started to deplete at a faster rate currently assessed at 33.94 mn t as on 6 Oct ’20, sufficient for 19 days of power generation.
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