Coal India Ltd (CIL) has made provisional arrangement for the continuation of extant coal supply to the non-regulated sector costumers whose FSA (Fuel Supply Agreement) are expiring.
In this regard, the coal company has intended to continue the coal supplies for such customers till the required linkage auction are concluded.
Official notice from CIL reads: For all such bidders whose FSA are expiring on or before the cut-off date for a particular tranche of auction, the supply in terms of the expiring FSA would be continued till the last date of month in which linkage auction for that particular sub-sector is concluded or the date of expiry of the existing FSA, whichever is later.
The coal supplies under the expiring FSA would be discontinued for those bidders that are not successful in the auction.
For those bidders that are successful in the auction, the allocated quantity in the auction or linkage quantity (whichever is lower), would be supplied till the execution of new FSA. The price payable for such supply would be as per the expiring FSA.
However, if the time of execution of new FSA is extended beyond what is originally provided in scheme document, the price payable for continuation of extant coal supply in the extended period would be then calculated on the highest % premium bid by the concerned bidder.
Besides, the interim arrangement of coal supply would only be available to the bidder from the coal company in which the bidder’s FSA is expiring.
Illustration:
Suppose a company named XYZ falling under CPP (Captive Power Plant) sub-sector has FSA for 10 LT (Lakh Tonne) coal supply from MCL.
The FSA for the coal supply is expiring on 30 Apr’18 and the date of conclusion of Linkage auction for the CPP sub-sector is 5 Jul’18.
Case –I: If the bidder is not successful in the linkage auction.
In this case, the coal would be supplied under the FSA till 30 Jul’18, and would be discontinued thereafter.
Case-II: If the bidder is successful, and has acquired 10 LT coal in the linkage auction.
| Source | Quantity | Price | |
| Linkage booked by XYZ under linkage auction for CPP | From Source A, MCL | 3 LT | @ 20% premium |
| From Source B, MCL | 3 LT | @ 30% premium | |
| From Source C, SECL | 4 LT | @40% premium |
The coal supply upon the conclusion of linkage auction would be carried out in the manner described below,
| Source | Quantity | Price | |
| Coal supply from the date of expiry of FSA till the conclusion of linkage auction (from 1 May’18 to 31 Jul’18) | Extant Source, MCL | 10 LT | Extant price (NRS notified price) |
| Coal supply from 1 Aug’18 till signing of new FSA | Extant Source, MCL | 6 LT | Extant price (NRS notified price) |
In case, the new FSA is not signed within 150 days* (which is the maximum period provided in the original scheme document) from the date of conclusion of the auction (i.e. till 2 Dec’18) then,
| Coal supply from 3 Dec’18 till signing of new FSA | Extant Source, MCL | 6 LT | NRS notified price + 30% premium |
The bidder would not be supplied coal from SECL in the interim period.
* 150 days is the maximum period provided in the scheme document for signing of FSA, which includes:
(a)15 days for issuance of LOA,
(b)75 days for document submission,
(a)60 days for document verification and FSA signing.
The period may be lesser depending upon the actual occurance of events mentioned above.
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