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NEW DELHI: The Cabinet Committee on Economic Affairs (CCEA) on Saturday approved offering of coal through a common e-auction window instead of sector specific auctions.
Coal companies will now be able to offer all non-linkage coal through a single e-auction window of Coal India Ltd or Singareni Collieries Company Ltd. (SCCL). This e-auction will cater to all sectors--power and non-regulated sectors--including traders.
The ministry of coal, in a statement, said the offerings "will be subject to CIL/SCCL meeting the coal linkage requirements against existing linkages and do not impact the current linkages to power and non-power consumers at contracted prices".
Coal offered through the single e-auction window shall be transport-mode agnostic with default option being through rail mode. However, coal may be lifted by consumers through road or other modes depending upon their choice and suitability without paying any additional charges or discount to coal companies.
Long term allotment of coal by Coal India and 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 company. However, taxes, duties, royalty, among others, shall be paid by companies on notified prices of coal for power sector.
According to the government, market distortions would be removed and single rate for all consumers will evolve in the e-auction market. The move is expected to boost operational efficiencies and lead to an increase in domestic coal demand by efficiency in 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.
CIL also has ambitious coal productions plans, with an aim to produce 1 billion tonne of the fuel by 2023-24.
With better availability of domestic coal, better price stability and predictability, coal imports are expected to come down drastically. This would reduce India's dependence on imported coal.
The move is also expected to ensure sustainability and development of the coal gasification technology. Use of clean coal technology like coal gasification would mitigate the adverse environmental impacts of coal usage.
The coal ministry said clubbing of the e-auction windows would not involve any additional cost to the coal companies.
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