3. Activities of the Association

Introduction:

After facing COVID-related restrictions and nationwide lockdown in 2020, India gradually unlocked its transportation, business and industrial activities in a phased manner during FY 2021-22. In a bid to bring country’s economy back on track, Government focused firmly on increasing the production of raw materials including coal. Surge in power demand as well as increased industrial activities caused massive upswing in coal demand from both Power ad Non-power sectors. As maintaining sufficient coal stock at power plants was given precedence, an unprecedented coal crisis descended upon the industries despite significant production growth by CIL, SCCL as well as captive mines and MDOs in the fiscal.

Throughout the financial year, Coal Consumers’ Association of India (CCAI) interacted with the Ministry of Coal, Power, Steel and DIPP, Ministry of Railways, Railway Board and the Zonal Railway offices, Chairman & Director Marketing and Senior officials of Coal India Limited (CIL) and its Subsidiary Coal Companies on regular interval both through written representations, telephonic conversations as well as in-person visits in order to highlight several operational, financial and quality related hurdles faced by its valued member companies during this period.

As partial lockdowns and restrictions on public gatherings were still in place, Association organised and participated in the numerous virtual meetings and video conferences with MoC, CIL and its Subsidiaries. CCAI was instrumental in raising all the relevant concerns which are detrimental to the interest of the consumers across the board and played an active part in formulation of new policies related to coal, power, Railways and mines by disseminating the views and suggestions of its valued member organisations. It is worth mentioning that overall activities of the Association have increased manifolds during the year.

During the FY2021-22, CCAI also prepared three monthly reports on power generation- distribution, supply pattern of fuel to the power sector and industrial production, growth and coal supply to NRS consumers by collating relevant data from multiple credible sources like MoC, CEA, National Power Portal, DIPP etc.

Amid a sea-change in demand-supply scenario in the global coal market in the aftermath of Russia-Ukraine conflict in early 2022 and India’s growing requirement of coal import, CCAI organised a webinar with the editorial team of Argus Media Limited for its valued members where insightful discussions were held on global coal price trends and fundamentals, impacts of Russia-Ukraine crisis, South African coal market update, Indian coal import fundamentals and outlook etc.

During the fiscal, the Association have made various representations on a daily basis to resolve the issues raised by its member companies. As it is difficult to provide the true reflection of the Association’s voluminous activities within a few pages, a glimpse of some of the concerns raised by CCAI during FY 2021-22 has been furnished below for your kind perusal:

BRIEF DETAILS OF ACTIVITIES OF COAL CONSUMERS’ ASSOCIATION OF INDIA (CCAI)

OPERATIONAL CONCERNS:

Submission by Power Sector to expedite release of e-Auction rakes:

There has been extremely low materialisation of rakes allotted under e-Auctions including Special Forward e-Auction for Power Sector and rakes allotted under the same e-Auctions are pending indefinitely. More than 600 rakes are pending from SECL and MCL.

Request has been made to Ministry of Coal, CIL, CEA and the Railway Board so that 15% - 20% of the total supply of rakes / day to the Power Sector may be earmarked and supplied against e-Auction quantities in tandem with FSA rakes.

Submission by Power sector regarding regular short-supply from various mines of MCL, SECL, ECL & WCL:

*Power Sector consumers with linkage auction FSAs were facing short-supply via rail mode from MCL’s Talcher, Sardega sidings to the tune of 4%-5% and from Sardega and IB Valley to the tune of 1.5%-2% sidings during October ’21 while in some cases, short-receipt ranged up to 9% as well. 4% short-receipt could be observed

* From SECL’s Burhar, Churcha, Naurajabad, Bhatgaon, Rajnagar OC, Katora and NCPH sidings, 4%-7% shortreceipt was occurring in almost all the rakes supplied during Oct-Nov’21 period.

* From ECL’s Bankola, Jhanjra, SonepurBazari, Pandaveswar, regular short-receipts to the tune of nearly 2% was occurring in the rakes supplied from those sidings in October ’21.

*From Wani area of WCL, regular short-receipts to the tune of over 3% was occurring in the rakes supplied during October ’21.

Requests has been made to CIL and the concerned Subsidiaries to ensure proper loading of coal in rakes, examine and recalibrate the weighbridges at regular intervals etc. to mitigate instances of short-receipt.

Soliciting dispensation for Case 2 Scenario 4 Power Plants under Section 63 of Electricity Act, 2003 to avail rationalisation of coal Linkages without any requirement of Supplementary Agreements:

As per CIL’s notification to certain IPPs which had submitted Expression of Interest (EoI) for availing the facility of linkage rationalization, the IPPs are required to sign a supplementary agreement approved by the appropriate Electricity Regulatory Commission with DISCOMs to pass on the entire benefit of actual cost saving.

However, IPPs which belong to Section 63, Case 2 Scenario 4 Power Plants established through a competitive bidding process for determination of tariff for procurement of power, for them actual landed cost of coal is passed on to the State Discoms irrespective of source/grade of coal. Therefore, any savings due to this linkage rationalization would automatically get passed through as per the Energy Charges Formula under Schedule 7 of the PPA.

Request has been made to Ministry of Coal and Ministry of Power so that for the Case 2 Scenario 4 under Section 63 Power Plants, the Supplementary PPA is not required as the actual benefits/cost savings acquired through rationalization of linkages would be passed on to the State Distribution Companies.

Submission for prioritizing coal supply to super-critical plants set up under Section 63 of the Electricity Act:

TPPs which fall under super-critical category set up under Section 63 of the Electricity Act and 100% power tied up with the state electricity boards are getting much lesser number of allotted rakes as per coal supply matrix which has led to severe depletion of coal stock at the plant ends. Hence, they are not able to generate power to their full capacity.

Request has been made to Ministry of Power to consider these super critical plants at par with central and state Gencos in terms of giving priority regarding sanctioning and dispatching of coal rakes provide higher GCV coal.

Submission by Power consumers regarding obstruction in coal supply via RcR mode:

Due to high coal demand in Power Sector, CIL allowed supply of coal to the Utilities through Road-cum-Rail (RcR) mode as and when supply through Rail mode is insufficient. However,

*Supply of coal through RcR mode is an intermittent supply arrangement for the Power Sector for a relatively smaller quantity. Therefore, the number of interested bidders is significantly less, causing rate of loading and transportation of coal to be significantly higher than the long-term contract awarded for the same area.

*There is substantial time lag between the issuance of DOs and starting of supply of coal from pithead to Railway good sheds due to formalities like obtaining mining permit, truck permit etc.

*Power sector and Industries are asked to procure the allocated quantities from the same source in RcR mode. So number of trucks per consumer gets drastically reduced as road loading points function with a fixed capac-

*The Railway good sheds handle both inward traffic and outward traffic. Therefore, till the evacuation of the inward traffic, stacking and loading of coal in rakes for outward traffic cannot be allowed.

Request has been made to the MoC and CIL to ensure that consumer-wise allocation of coal quantity may be commensurate with the loading capacity as per available infrastructure of a particular road loading point. Rational allocation of good sheds / private sidings based on booked quantity is also requested.

Submission by Power Sector Consumers of Raigarh area regarding allocation of coal under the dispensation of SHAKTI Policy, Para B (viii) (A) short term from nearby sources:

Power Utilities having their plants in the vicinity of Raigarh area in Chhattisgarh have stated that they have been offered coal in the previous tranches of SHAKTI (B) (viii) from far off mines (100-150 kms away by Road) from the Power generating plants. CIL’s decision to offer coal under Shakti (B) (viii) has helped the power plants but increased the price of coal due to increased transport cost.

Request has been made to CIL so that the cluster of Power plants present near Raigarh area could be provided coal from nearby sources by the Subsidiaries such as Baroud OC, Chaal OC and Bijari OCP of SECL and Kulda and Garjanbahal OCP of MCL.

Submission for immediate issuance of pending DOs against Linkage quantity from different CIL Subsidiaries:

Significant amount of linkage quantities to be supplied to the Industries have been kept pending since last year from a number of collieries under various CIL Subsidiaries (SECL sidings including Baroud, Jampali etc.). In some cases, RDOs against the offered quantities have not been issued yet.

CIL and its Subsidiaries have been requested for immediate issuance of pending DOs to the Industries against their Linkage quantities.

Submission for extension of RDO validity expiring in April, May ’21 till 30th June ’21 due to severe COVID situation:

Sudden upsurge of Covid-19 cases across India during March-April ’21 had made coal transportation through Road mode difficult due to transporters and drivers getting infected in large numbers, pocketed lockdown in different states and lower turn out of vehicles. In spite CIL’s decision to extend validity of RDOs till April’21, the consumers, whose DOs were issued in March’21, were not able to complete lifting within the extended time period due to COVID crisis.

Request was made to MoC, CIL and the concerned Subsidiaries so that the facility to lift DOs ending in April & May’21 be extended upto 30th June for both Power and NRS consumers for FSAs and e-Auction Quantities.

Appeal on behalf of NRS consumers regarding urgent requirement of Linkage Auction for Sub-sectors except Sponge-iron subsector:

The Tranche-V of NRS Linkage Auction for the Sponge Iron sub-sector was conducted in December, 2019, Linkage Auction of Non-coking coal for the rest of the Sub-sectors under Tranche-IV, was last held way back in November- December, 2018.

Request has been made to CIL to conduct the Tranche-V of NRS Linkage Auction for rest of the Sub- sectors at the earliest possible and announce the tentative timeline for the Linkage auction well in advance so that the

Submission by NRS Consumers to immediately improve supply of coal rakes to the Industries:

Supply of coal to NRS consumers via Rail mode has significantly deteriorated while Road mode supply has also been hampered as preference is given to Power Sector via Road-cum-Rail (RcR mode). Coal requirement of the NRS Sub-sectors is around 25%-35% of the total coal production which is around 5 lakh tonne but total quantity dispatched to NRS Consumers via Rail, Road and RcR mode combined is lower than 3 lakh tonne/day. Also, more than 4,000 FSA and e-Auction Rakes allotted to NRS have been pending.

Due to dearth of supply in FSA and e-Auction quantities, many NRS consumers are compelled to procure coal from the open market by paying 3-4 times of the premiums or import coal in spite of surging global prices and soaring freight rates. Also, barring a few plants, most of the boilers, kilns and furnaces are designed to run mostly on indigenous coal.

Request has been made to the Hon’ble PMO, MoC, MoP, MoR as well as other relevant Ministries, CIL and its Subsidiaries to ensure a justified ratio of coal allocation between Power Sector and Industries by immediately releasing pending rakes, conducting spot and exclusive auctions more frequently and offering more quantity in the e-auction and linkage auctions.

Submission by NRS Consumers for conducting Exclusive e-Auction from various CIL Subsidiaries:

Exclusive e-Auction for NRS Consumers were stalled from most of the Subsidiaries in 2022 (except Steel grade coal from BCCL). Though Spot auctions were being held, NRS Consumers are compelled to procure coal from open market by paying extensively higher costs.

During FY 2021-22, the number of Exclusive e-Auctions held by various CIL Subsidiaries reduced drastically and quantities offered in those auctions are not sufficient to meet the requirement of the NRS consumers. The offered quantity was also of comparatively lower grade and supplied via Road Mode, making it inconvenient for the big Industries and plants situated at a far-off location to procure coal seamlessly.

Request has been made to the Ministry of Coal, CIL and Subsidiaries to immediately offer coal rakes and increase present supplies for NRS Consumers and also to conduct Exclusive e-Auction for the Non-power sector on a tri-monthly basis.

Request for releasing long-pending rakes for NRS Consumers:

While CIL Subsidiaries like SECL and MCL were dispatching a moderate number of rakes and even coal companies like ECL, BCCL and CCL started supply via Rail Mode to the NRS consumers during the third quarter of FY 2021-22, there was hardly any supply of rakes from WCL and NCL to the Industries including CPPs till midJanuary over 500 rakes allotted Non-regulated Sector were pending from these two Subsidiaries.

Request has been made to CIL and concerned Subsidiaries to immediately commence rake supply to the NRS Consumers so that they can run their plants.

Submission by NRS Consumers for increasing rake despatch in close circuit:

Railways have allowed close circuit dispatch within the division and Subsidiaries permitted conversion of mode of supply from Rail to Road. But the amount of coal supplied to the Industries is grossly inadequate for their sustenance.

Submission has been made to the Railway Board and CIL to increase supply of rakes to the NRS Consumers having linkages through a window of dispatches in close circuit.

Request for consideration of CEA norms in determining normative coal requirement for CPP sub-sector in Tranche-V NRS Linkage Auction:

As per coal consumption norms laid down by CEA for CPP Sector, certain factors need to be considered for calculating normative coal requirement including loss of heat value of coal for storage @85 KCal/kg, 5% GCV loss due to the difference between GCV (ARB) and GCV (EQ) and 0.8% transit loss, which are not considered in the scheme document of CIL leading to less quantity of coal supplied to CPPs in comparison to their actual coal requirements.

Request has been made to CIL for inclusion of these factors for calculating normative requirement of coal in the CIL scheme document for NRS linkage auction for CPPs as per existing CEA guidelines.

Soliciting extension of time gap of two weeks between the offer dates to commencement Tranche V NRS Linkage Auction for Cement Sub-sector:

As per the CIL notification, offer of cement auction will be uploaded by 6th September, 2021 and the auction will commence from 10th September, 2021. However, the consumers from Cement sector have stated that such a short time between uploading of offer and commencement of auction is insufficient as it usually takes around 2 weeks to do a thorough review of the mines including physical verification for a long term commitment. Also, MSTC registration compliance with DSC and POA formalities take time.

Request has been made to CIL for providing at least two weeks of time between declaration of schedule and commencement of auction for the cement sub-sector.

Submission for increasing offer of coal from ECL, SECL, WCL and NCL in Tranche V NRS Linkage Auction for Cement Sub-sector:

Assessment of the annual coal requirement of various cement manufacturers highlighted for the cement manufacturers from North Eastern India, the cumulative annual coal requirement stands at around 20 lakh MT. Also, coal requirement by Cement plants from rest of India is much higher than what was offered in the Tranche V NRS linkage auction.

Request has been made to CIL and Subsidiaries like ECL, SECL, WCL and NCL separately for offering more quantity in the upcoming linkage auctions and list of preferred mines from respective Subsidiaries were also mentioned for consideration.

Submission by NRS consumers requesting extension of the term of Tranche-I NRS Linkage Auction FSAs expiring in 2021:

As per CIL directive, NRS Linkage auction FSAs of Tranche-I of various sub sectors will not be renewed after its initial term of five years. However, in order to run the manufacturing plants seamlessly, a continuous and assured supply of a specific quality of coal is necessary which can only be obtained through Linkage Auctions as they are source-specific and mode-specific and ensure supply of a specific grade of coal.

There is an uncertainty in procuring coal of required quantity and quality from a particular source through competitive bidding in the next tranche of linkage auction as and when it would be conducted. Also, Exclusive and Spot e-Auctions do not ensure assured supply of a specific grade of coal.

Request has been made to MoC and CIL to consider the provision of extending the FSA term through mutual consent of both parties (CIL and the NRS consumers) as per clause 2.4 of the NRS Linkage Auction FSA.

Due to restrictions in rake allocation to Industries and obstructions in coal movement via Road/RCR modes NRS consumers are often facing scarcity of coal. Also, stock in many plants are alarmingly low due to lack of production/transport issues in certain mines.

MoC is requested to allow interplant transfer of coal within the same company/business group (within different units of the same organisation) for higher capacity plants in the Non-Power Sector in line with the Power Sector as it would ensure maximum lifting of booked Linkage/Exclusive e-Auction quantities, reduce dependence on imported coal and encourage the NRS consumers to go for more long-term Linkage/Exclusive Auction security.

Submission by NRS consumers with premature termination of Linkage Auction FSA to be permitted to participate in the ongoing Tranche-V:

Several NRS Consumers procuring coal under NRS Linkage auction FSAs from Tranche-I to Tranche IV had cancelled their FSAs within lock in period of two years for various reasons. Subsequently as per the FSA provision, large amount of security deposit made by those consumers have been forfeited and the organisations may be also disqualified from participating in the immediately subsequent tranche of any auction for the nonregulated sector conducted by CIL.

Considering the log gap between the last (Tranche IV) & ongoing (Tranche V) NRS Linkage Auction and the financial penalty, request has been made to CIL not to restrict the consumers from participating in the ongoing NRS Linkage auction for CPP and Other Sub-sectors (Tranche-V).

Submission regarding temporary change of mode from Road to Rail in Apr-May ’21 due to increasing number of COVID cases:

Increase in COVID-19 cases in many parts of India was affecting the availability of transport vehicles, crew/ truck drivers and was causing coal transport by Road mode unviable.

Request has been made to CIL to extend the temporary arrangement of change of mode for coal transportation from Road to Rail for the willing consumers who have urgent requirement of coal for their MSQ from April’21 till September’21.

Submission by NRS Consumers for change of mode from Rail to Road/RcR:

Rakes allotted to many successful bidders from the Non-power sector in Spot e-Auctions have getting delayed indefinitely since November ’21 due to supply priority to the Power Sector.

Request has been made to the Ministry and CIL to allow the NRS consumers to opt for change of mode for coal transport temporarily from Rail mode to Road mode as well as Road cum Rail (RcR) mode if the allocation of rakes is delayed beyond 90-days period.

Request for extension of lifting period of coal through Road mode:

The lifting period of coal at all the Subsidiary coal companies were extended by CIL multiple times in 2021 in view of the pandemic situation which led to massive disruption in road transport, dearth of vehicles and drivers and blockade in inter-state communication due to complete or partial lockdown in different states. Though the situation had improved further, it would have been almost impossible for many consumers to lift the allotted quantity from various CIL Subsidiaries within the extended time.

Request has been made to CIL to extend the facility to lift coal against RDOs for both Power and NRS consumers for FSAs and e-Auction Quantities.

Appeal on behalf of NRS consumers regarding urgent requirement of Tranche-V Linkage Auction for Subsectors except Sponge-iron subsector:

The Tranche-V of NRS Linkage Auction for the Sponge Iron sub-sector was conducted in December, 2019, Linkage Auction of Non-coking coal for the rest of the Sub-sectors under Tranche-IV, was last held way back in November- December, 2018.

This delay in conducting Tranche-V of NRS Linkage Auction for CPP, Cement and Others Sub-sectors has made the functioning of a large number of Industries extremely difficult due to uncertainty over long-term coal supply commitment.

Request has been made to CIL to conduct the Tranche-V of NRS Linkage Auction for rest of the Sub-sectors at the earliest possible and announce the tentative timeline for the Linkage auction well in advance so that the Industries may plan accordingly for long-term procurement of coal.

Request for extension of timeline for lifting of coal (RDOs) for both Power and Non-power sector:

Both Utilities and Industries were not able to procure coal within the RDO validity due to various reasons including outbreak of pandemic, lack of transport vehicles and drivers, lack of manpower for loading and unloading of coal, incessant rain etc.

Multiple representations were given to the Ministry of coal and CIL for extending the validity of RDOs originally expiring in May ’21 till end of July ’21.

CIL has extended the timeline for lifting of coal till 20th July, 2021.

COAL QUALITY RELATED CONCERNS

Submission regarding significant grade slippage in coal supplied via Rail Mode from ECL, NCL, CCL:

Power sector procuring coal from various CIL Subsidiaries such as ECL, NCL, CCL are facing significant grade slippage in coal supplied via rail mode during August-October period in 2021.For instance,

*Grade slippage to the tune of 3-4 grades observed from ECL’s POCP, Bankola, Sonepur Bazari sidings. In some cases variation ranges upto 7 grades. From ECL’s Salanpur and Mugma sidings grade slippage of 5-8 grades was observed during March-April ’21. The coal quanlity further deteriorated during May-June ’21 as grade slippage is to the tune of 6-7 grades lower than declared grades.

*2-3 grade slippage observed in NCL’s Dudhichua, Dudhichua WW, Bina WW, Block-B sidings.

*2-3 grade slippage observed in CCL’s Birds Sounda, Churi sidings. In a few rakes grade slippage has been as high as 5 grades.

Request has been made to CIL and the respective Subsidiaries to to eradicate grade slippage and ensure supply of FSA-grade of coal to the Power Sector consumers. Also, re-gradation of certain mines are requested where instances grade variation are rampant.

Request for reassessment of mines at Salanpur and Mugma areas of ECL due to consistent and significant grade slippage:

In spite of certain improvement in the quality of coal supplied from ECL during February-March’21, the issue of significant grade variation again started occurring in coal supplied from various collieries of Salanpur and Mugma areas of the Subsidiary to the tune of 4 to 8 grades during March-April’21, which has led to enormous financial loss for the consumers.

Though one or two collieries under these areas are producing better quality coal, supply from most of the other collieries are of much lower grade containing of high amount of shale and other substances.

Request has been made to ECL and CIL to ensure supply of FSA grade of coal those collieries of ECL. Also, the coal controller is requested to conduct reassessment of ECL mines in Salanpur and Mugma area which may help in determining the actual grades of coal in those areas.

Submission by Power Sector regarding supply of lower grade coal and coal mixed with stones, boulders from NCL:

Quality of coal supplied from the DWWS, GCNM, SPUS sidings of NCL are often much lower than the declared grades. Also rakes supplied from various sidings of NCL has coal mixed with oversized stones and boulders which reduce the plant efficiency and increase ash load in the downstream. This also leads to higher average rake retention time (more than 8 Hours) in spite of usage of faster unloading methods through wagon tipplers.

Request has been made to NCL to reduce the presence of extraneous materials from coal to the extent possible and ensure supply of FSA grade coal to the consumers from the sidings mentioned.

Submission regarding unusually higher grade of coal received by Power sector consumer as per 3rd Party analysis report from SECL:

As per 3rd party analysis of a rake supplied to a Power Utility from SECL’s Junadih Public-Silo during July ’21, the analyzed grade of coal was G7. However, the feeding mine of Junadih Public-Silo is Gevra OC, where the effective grade of Gevra OC is G11. Also, as per the grade/quality certificate issued by SECL for FY 2021-22, no mines in Korba region have G7 grade coal.

Most of the error creeps in during the sampling process but there are hardly any chances of error in the analysis of coal as it is being done through automatic bomb calorimeters. So it could be deduced that the abnormally higher grade found in the 3rd party analysis may be due to some error in the process of sample collection.

Request has been made to CSIR-CIMFER to review the sample collection process at loading end so that representative samples may be collected in a proper manner and such discrepancies may be avoided in the future.

COMERCIAL ISSUES:

Submission regarding various forms of pending refunds from different CIL Subsidiaries:

Various forms of refunds pertaining to coal consumers across the board including operational refunds such as refund of additional coal value advance, security deposits, BGs related to financial coverage and performance security, EMDs, ad valorem taxes paid alongwith coal value, differential CST amounts and abnormal underloading/overloading charges; coal quality related refunds such as pending credit notes on account of grade slippage, excess surface moisture in coal and supply of ungraded coal have been pending since long.

Details of various forms of pending refunds from different CIL Subsidiaries to both Power and Non-power Sector consumers have been prepared in a tabular format and sent to MoC and CIL. MoC, CIL and its subsidiaries have been requested to ensure immediate processing of long-pending refunds. In case there is no definite timelines articulated in the FSA, suitable timeline may be framed for disbursement of refunds.

While certain Subsidiary Coal Companies (CCL, NCL & ECL) are providing refund of idle freight along with GST components charged by the Railways, SECL, MCL and WCL are not reimbursing the GST amount during refund of idle freight.

CIL has been requested to intervene so that all the CIL Subsidiaries reimburse the idle freights for under loading along with the GST amount.

Request for incorporating new guidelines for accepting FC BG by the Subsidiaries in the CIL Scheme Document of NRS Linkage Auction:

As per CIL’s modified guidelines of June 2020, financial coverage BG for coal supplies to Power and NRS consumers through FSA and e-Auction schemes had been reduced from as delivered price of coal for 30 days supplies to as delivered price of coal for 10 days supplies. However, SECL is still asking for FCBG equivalent to 30 days coal value and the revised FCBG modality has not been updated in scheme document so far.

CIL is requested to intervene to make necessary amendment in the scheme document in this regard so that so that NRS consumers of SECL may submit FC BG as per the modified CIL guidelines.

Application of the provisions of section 194-O of the Income-tax Act, 1961 in relation to e-Auctions of coal conducted for Power and Non-power consumers:

In addition to the bid price and the statutory levies payable for purchase of coal under various e-Auctions, coal consumers were also asked to deposit an additional amount of 0.75% of the material value as TDS within three working days. However, liability to deduct taxes under the aforesaid section is that of e-commerce operator and the company from whom taxes should be deducted is the e-commerce participant (seller of coal). Therefore, the said TDS should not be recovered from the coal purchasers.

Request has been made to CIL to ensure that the TDS should not be deducted from the consumers but it should be deducted from the coal value submitted to the e-commerce participants.

Request for not levying Composition User Fee on consumers operating within state of Jharkhand:

Composition User Fee (CUF) levied by Government of Jharkhand on mineral transporting vehicles for usage of State roads and/or bridges at the rate of Rs 600 per trip (Rs 1200 per round trip) should be levied on commercial vehicle owners/transport operators but CCL has decided to pay CUF on their behalf of the transporters for the period 26/10/2021 to 15/04/2022 which shall be recovered from the consumers, at the rate of Rs 60 (sixty) per tonne, as an additional charge as Reimbursement of CUF as an additional component in the coal sale bill.

Request has been made to CCL not to levy any additional charges/taxes on the coal bill in retrospective effect. It is also earnestly requested to consider not levying the aforementioned charge (CUF) on the consumers.

Submission regarding immediate release of pending BGs for the terminated FSAs:

For certain consumers from the Non-power sector, most of the FSAs with SECL’s Baroud OCP & Mahan-II OCP have been terminated in 2021 while cumulative Bank Guarantee (BG) amounts worth lakhs of rupees are yet to be released by the coal company.

Request has been made to SECL to immediately release the entire BG amount at the earliest possible.

Submission regarding complete or partial roll back of price increase of different grades of coal by SCCL as notified in January 2022:

Prices of different grades of coal (G-1 to G17) supplied by SCCL as well as Washery Grades have been increased multiple times (five times) in FY 2021-22. Such a recurrent and steep hike in coal prices is putting a huge financial pressure on the coal consumers dependent on SCCL and disrupting their annual consumption plan.

Request has been made to the Ministry of Coal and SCCL to consider either complete or at least partial roll- back of the hiked coal price as notified by the company on 10.01.2022.

Submission for rescheduling the dates of Tranche VII NRS Linkage Auction by Singareni Collieries Company Limited (SCCL) for Cement and CPP Sub-sectors:

It had been found that the dates for Tranche VII NRS Linkage Auction by SCCL for Cement Sub-sector on 20.09.2021 and 21.09.2021 and for CPP Sub-sector on 22.09.2021 and 23.09.2021 were coinciding with the CIL Linkage auction dates for Cement Sub-sector.

Request has been made to SCCL to reschedule the date of Tranche VII NRS Linkage auction for Cement and CPP Sub-sectors after the CIL auction for Cement Sub-sector is concluded so that the NRS consumers may participate in both the auctions.

Submission regarding refund of EMD against coal procured through different auctions:

Consumers across the board procuring coal from SECL could not lift booked quantities till mid-October’21 due to lack of production and adverse condition of coal evacuation infrastructure in certain mines of the Subsidiary such as Baroud, Chhal, Gevra, Dipka, Kusmunda, Bijari OCP. However, SECL is offering coal through Spot eAuctions via Road Mode from the same sources. So the consumers have to pay high premiums to procure coal via e-Auctions in spite of already having valid FSAs.

In spite of extending the validity of RDOs and the period of coal lifting by CIL during COVID-19 outbreak, a number of consumers especially from the Power sector procuring coal from SECL, could only manage to lift a portion of their allotted quantities due to unfavourable conditions.

Request has been made to CIL and respective Subsidiaries including SECL so that the EMD amounts are not forfeited for short-lifting but refunded along with the coal value of unlifted quantity to the respective consumers.

Submission to SECL by the coal consumers for refund of huge coal value against lapsed quantities and EMD:

Despite the extension in coal lifting period till 20th July ’21, consumers from the Power sector could only manage to lift a portion of their allotted quantities while the remaining portion got lapsed due to various reasons like unavailability of declared grade of coal, adverse weather conditions for production of coal, less production of auctioned grade of coal due to geological disturbance which has caused massive amount of working capital of these companies in the form of coal value including Royalty, DMF, NMET etc. and EMD worth crores of rupees to be blocked due to Non- materialisation of remitted amounts through refund.

Request has been made to SECL for refund the coal value against lapsed quantity and EMD to the concerned customers at the earliest possible.

Submission for early issuance of long-pending credit notes and coal value reconciliation by Road- mode consumers:

Consumers from both Power and Non-power sectors have been facing delays (in some cases more than 2 years) in reconciliation of excess coal value against quantity despatched through Road mode which has caused a large amount of their fund to be stuck for long. In case of upgradation in analysed grade of coal, issuance of supplementary invoices is inordinately delayed for the Power consumers (Road mode).

Request has been made to CIL and Subsidiaries for timely issuance of pending credit notes and supplementary invoices and ensure reconciliation of coal bills pertaining to despatch through Road mode at the earliest possible.

Submission by Power Sector Consumers for refund of GST amount along with reimbursement of idle freight on account of under loading from SECL:

A number of CIL subsidiaries are providing refund against idle freight along with GST components charged by the Railways. However for consumers procuring coal from SECL, the refund of GST amount is not happening during the reimbursement provided for idle freight.

Request has been made to CIL and SECL so that adequate measures may be taken at the earliest possible in order to provide reimbursement of GST amounts along with refund on account of under loading.

Requesting refund of Security Deposit against terminated FSAs:

Certain NRS Consumers procuring coal from different Subsidiaries have not been getting the refund of Security Deposit made by them against their FSA by Road Mode that has been terminated earlier this year.

Request has been made to CIL and the Subsidiaries for early release of the Security Deposit to the respective companies whose FSAs have expired.

Request for reimbursement of idle freight on account of under-loading alongwith GST

Certain Subsidiary Coal Companies (CCL, NCL & ECL) are providing refund of idle freight alongwith GST components charged by the Railways to the Power Utilities but others such as SECL, MCL and WCL are not reimbursing the GST amount during refund of idle freight.

Request has been made to CIL so that all Subsidiary coal companies reimburse the idle freights for underloading along with the GST amount.

Request for not calculating compensation towards short-lifting for deemed delivered quantity against carry forward rakes of Power Utilities:

In spite of the provision of carry forward the lapsed rakes which could not be supplied to the Power sector consumers due to production issue/Railway constraints, Utilities procuring coal from SECL stated that due to continued demand-supply mismatch and Railway constraints including unavailability of rakes, backlog of carry forward rakes have continued to accumulate.

Thus, the consumers are not getting the quantities allotted to them for long while the advance coal value submitted by them is stuck with the coal company for an indefinite period which leads to significant financial loss.

Request has been made to SECL and CIL to ensure that the carry forward rakes may be supplied to the concerned consumers on time so that their requirement of coal could be fulfilled and financial loss may be minimized.

The carry forward rakes which are not supplied to the generators because of production issue / Railway constraints are not taken in the calculation of compensation for short-lifting against deemed delivered quantity.

Request for providing extension of timeline for lifting of coal and date of payment for deposition of coal value under various RDOs:

Coal transportation through Road mode has become extremely difficult since the upsurge in Covid-19 infections, as transporters and operators and coal handling workers are getting infected in large numbers causing lower turnout of vehicles and scarce workforce.

Request has been made to CIL to extend the lifting period and payment of coal value for the RDOs ending in April & May’21 till June end (30.06.2021) for both Power and NRS consumers against FSA and e-Auction quantities.

Considering the situation, CIL has provided extension in lifting period and date of payment deposition of coal value till 15th June 2021 so far.

Submission regarding invoking of general Force Majeure allowing cancellation of rakes by NRS consumers during COVID period:

Due to huge pendency of rakes in the Non-lapsable category, NRS consumers procuring coal from various Subsidiaries of CIL have not been receiving rakes which were pending since FY 2019-20 in spite of high demand at their end. However, during the lockdown period, those long-pending rakes were being allotted to the NRS consumers in large numbers as demand in the Power sector waned down.

Many NRS consumers were forced to cancel the rakes as their plants were either shut down or running at low capacity during the lockdown period. As a result they were heavily penalized by certain Subsidiaries for non/ short-lifting. Even rakes cancelled in April, May & June, 2020 (lockdown period) have been considered while calculating this penalty for the FY 2019-20 as these rakes were scheduled to be supplied within FY 2019-20, which could not be done within stipulated time.

Requests have been made to MoC and CIL so that,

• Subsidiaries may be allowed to invoke general Force Majeure for waiver of performance related obligations during national lock down period i.e. 24th March to 31st May, 2020.

• Subsidiaries may allow waiver of all forms of penalties imposed on the consumers for Non- performance during the Pandemic-induced lockdown period.

• Termination of FSAs may not be imposed for rakes being cancelled during the national lockdown.

Request for not calculating compensation towards short-lifting for deemed delivered quantity against carry forward rakes of Power Utilities:

In spite of the provision to carry forward the lapsed rakes which could not be supplied to the Power sector consumers due to production issue/Railway constraints, Utilities procuring coal from SECL stated that due to continued demand-supply mismatch and Railway constraints including unavailability of rakes, backlog of carry forward rakes have continued to accumulate.

Thus, the consumers are not getting supply of their value paid rakes allotted to them for an indefinite period which leads to significant financial loss.

Request has been made to SECL and CIL so that option may be offered to the generators not to carry forward rakes which already have huge pendency.

Also, the carry forward rakes which are not supplied to the generators because of production issue/ Railway constraints are not taken in the calculation of compensation for short-lifting against deemed delivered quantity.

Submission by NRS Consumers regarding extension of RDO validity issued from specific areas of WCL:

The daily dispatch plan to the Industries has been revised based on area-wise commitments under Linkage Auction FSAs, Spot and Exclusive auctions from 25.03.2022. The revision has caused the average daily dispatch from WCL’s Ballarpur, Wani North, Nagpur and Pench (also Kanhan and Pathakhera) areas to reduce.

Requests have been made to WCL and CIL to extend the RDO validity of the aforesaid WCL areas where the daily coal dispatch quantity has been reduced so that allotted quantity may be lifted completely.

Submission to WCL by the Power Sector Consumers for immediately conducting Special Forward e- Auction:

Special Forward e-Auction for Power Sector consumers both in Rail and Road mode consumers were last held on 09.02.2021 for the February’21–April’21 period in spite of an urgent requirement of coal among the Utilities.

WCL was requested for urgently conducting Special Forward e-Auction in order to replenish the shortage in coal stock at their respective plant ends.

Request by NRS consumers for inclusion of certain WCL mines in rest of Tranche-V NRS Linkage Auctions:

The consumers from Cement, CPP and Other Sub-sectors procuring coal from WCL have requested for the Tranche-V of NRS Linkage Auction for their respective sub-sectors to be conducted immediately and mentioned certain WCL mines including Ballarpur, Tawa I & II, Chattarur I & II in Pathakera area, Nehariya and Urdhan sidings in Pench area and Singhori and Gondegaon sidings in Nagpur area to be including in the upcoming linkage auction.

The requests have been percolated to the WCL authorities.

Submission by Power Utilities to immediately increase supply of rakes from SECL on a daily basis:

Supply of rakes from various sidings of SECL has been significantly lesser than respective MSQs in December’21. Supply of coal from SECL’s Dipka, Gevra, Kusmunda sidings under the Korba coalfields area has been insufficient.

Request has been made to SECL, CIL and the Railway Board to increase the number of rakes loaded from these areas to supply committed FSA quantities to the Power Plants.

Submission for immediate issuance of pending DOs against Linkage quantity from different sidings of SECL:

Significant amount of linkage quantities allotted to Industries have been kept pending since last year from SECL sidings including Baroud, Jampali etc. as RDOs against FSA quantities are not issued. However, SECL is offering coal through Spot e-Auctions via Road Mode from the same sources. So the consumers have to pay high premiums to procure coal via e-Auctions in spite of already having valid FSAs.

SECL and CIL are requested for immediate issuance of pending DOs to the Industries against their Linkage quantities so that the Industries may procure coal via Road mode as Rail mode supply is prioritized for Power utilities.

Submission to SECL regarding continuation with single LC against coal supply through Rail and Road mode:

Generally, consumers had to provide a single Letter of Credit (LC) for the entire supply irrespective of the mode of dispatch. However, as per instructions given by SECL, separate LC needed to be issued for separate modes of dispatch (Road or Rail mode). Issuance of separate LC for separate modes would be financially difficult for many consumers avilig both mode of procurement.

Request has been made to SECL to continue with the provision of a single LC for entire supplies irrespective of mode of dispatch (Rail/Road) to the respective companies.

Submission for refunding of Evacuation Facility Charges (EFC) in case of despatches through rapid loading arrangements:

The consumers have to remit Evacuation Facility Charges at the standard rate of Rs. 50 per tonne along with the coal value while receiving despatches from SECL’s Junadih sidings through Silo loading, which is a form of rapid loading. However, as per CIL notification dated 19th December 2017, Evacuation Facility Charges (EFC) are not applicable for coal despatches through rapid loading arrangements.

Request has been made to SECL to ensure that the amount remitted by consumers in terms of EFC may kindly be refunded at the earliest in case of despatches through rapid loading arrangements.

Request for early issuance of long-pending credit notes and coal value reconciliation for Road-mode consumers by SECL:

Inordinate delay in reconciliation of excess coal value against quantity despatched through Road mode by SECL has been a point of major financial concern for both Utilities and Industries as large amount of their fund has been stuck with SECL for a long period.

Request has been made to SECL and CIL to ensure immediate issuance of pending credit notes and reconciliation of coal bills against procurement of coal through Road mode.

Submission for supply of coal as per MSQ and providing e-Auction rakes without deposition of fresh advance from MCL:

MCL decided to allocate coal to NRS consumers at trigger level (75% of the MSQ) in case the FSA is signed under Linkage Auction since January 2022. Restricted supply led to even greater coal crunch among Industries.

Request has been made to MCL and CIL to ensure supply of coal as per MSQ to Non-regulated Sector FSA Consumers. Advance payment to be made by the NRS FSA consumers may not be higher than coal value equivalent to MSQ of one month. Also, MCL and CIL are requested for liquidation value-paid pending rakes to the Industries and allowing them to participate in the upcoming auctions without depositing fresh advance as coal value.

Submission by Power Sector consumers regarding huge grade slippage in coal supplied from specific ECL sidings:

Despite temporary improvement in the quality of coal supplied to the Power Utilities from various ECL sidings during February-March ’21, the issue of significant grade slippage started reoccurring in the rake supplied from ECL’s Salanpur and Mugma sidings where grade variation to the tune of 4-6 grades could be observed. This led to massive financial loss to the Power sector consumers.

It has been stated by ECL that through conducting Quality Awareness Week, continuous monitoring and strict vigil on third party sampling have been implemented to eradicate the problem of grade slippage.

Representations were given to ECL, CIL and the Ministry of coal so that measures could be taken to ensure supply of requisite grade as per FSA to the customers of ECL.

Immediate requirement of coal from ECL for NRS consumers through Exclusive e-Auction:

Exclusive e-Auction for the Non-power Sector (including CPPs) is generally held on a bi-monthly basis by ECL. The auction was last held on 30th March, 2021 and Non-power sector consumers without having Linkage auction FSAs prefer to procure coal through Exclusive e-Auction.

Request has been made to ECL to conduct an Exclusive e-Auction for the NRS consumers at the earliest possible and also ensure that Exclusive auctions can be held regularly on a monthly/bi-monthly basis so that the Industries do not suffer from dearth of fossil fuel.

Submission regarding further deterioration in quality of coal supplied from Salanpur and Mugma area of ECL:

As per the Power sector consumers, quality of coal supplied from ECL Salanpur and Mugma sidings through Rail mode further deteriorated during May-June ’21 as coal supplied from these two sidings were 6-7 grades lower than the declared grade.

Though one or two collieries under Salanpur and Mugma are producing better quality coal, supply from most of the other collieries from these two areas are of much lower grade containing of high amount of shale and other substances.

Request has been made to ECL and CIL to take necessary measures to improve the coal quality supplied from these two areas as Power producers procuring coal from ECL, largely depend on supply from these sidings.

Submission for reviewing the provision of taking additional advance by NCL from NRS consumers availing Usance LC mode of payment:

While availing the Usance LC payment option in Rail mode, NRS consumers have to deposit an advance amount equivalent to seven (7) days coal value and a Financial Coverage amount equivalent to 10 days coal value over and above the LC amount.

However, Consumers procuring coal from NCL via Rail mode have pointed out that in addition to the above payments, they also have to deposit a fresh advance to the coal company to ensure that the balance advance payment always remains equivalent to not less than one-month coal value for availing Usance LC mode of payment, which is not levied on the consumers procuring coal from other CIL Subsidiaries. This practice is defeating the very purpose of Usance LC.

Request has been made to NCL so that the matter of keeping aditional advance value of one month MSQ (ACQ/12 and converted to no. of rakes) fromNRS consumers procuring coal through Rail Mode from NCL may kindly be considered so that the payment schedule is in conformity with the Usance LC norms formulated by CIL.

Submission by NRS consumers regarding deferment of rakes from NCL through Dhanbad Division of East Central Railways:

NRS consumers procuring coal from Northern Coalfields Limited (NCL) through Dhanbad division of East

Central Railways are not in a position to receive the rakes allotted to them as coal handling workers are hardly available at the plant ends. Therefore, they have requested the Railways to defer the rakes till the pandemic situation improves. However, Railways have suggested them to cancel the rakes as per norms.

Request has been made to CIL and NCL to consider taking the matter with the Railways like the previous year so that deferment of rakes may be allowed to those consumers, who are unable to receive rakes until the condition improves.

Submission regarding constant overloading of rakes from Spur sidings of Talcher Area and Sardega Mines of MCL:

Power consumers have raised concern over continuous overloading of rakes from Talcher Spur sidings and Sardega mines of MCL since the last few months. Some of these consumers have to pay significant punitive charges amounting to crores of rupees to the Railways on account of overloading of rakes during August ’21. Also, rakes are detained for load adjustment for a long time.

Request has been made to MCL to ensure proper loading of rakes in order to eradicate the issue of overloading in future.

Continuous and significant short-receipt of coal from MCL’s Talcher Spur (I-VI) Sidings:

Power sector consumers have been facing difficulties due to continuous and significant short-receipt of coal from Spur (I to VI) sidings of Talcher coalfields at MCL over the last few months mostly due to faulty weighment at the bi-directional weighbridges in the areas.

Meetings have been held with MCL authorities at the headquarters and area GMs of Bhubaneswari and Jagannath mines. Request has been made for recalibration of weighbridges where the issue of short-receipt has been frequent.

The MCL authorities have promised to look into the matter with utmost gravity. MCL has undertaken the inspection of the status of weighbridges in the Spur sidings and also made arrangement for weighing empties and loaded rakes separately as much as possible. MCL has also requested to send the company representatives or handling agents of the affected organisations to the concerned areas of MCL to witness the weighment of rakes and hold discussions.

ISSUES RELATED TO RAILWAYS

Submission for considering actual tare weight instead of designed tare weight for weighment of coal rakes:

Designed tare weight is lower than the actual tare weight of wagons due to various reasons such as variable stencilled tare weight of different wagons under the same type, increase in tare weight of older wagons due to repairing, weathering, deposition of coal dust and extraneous material etc. Therefore, calculation of RR based on designed tare weight leads to significant short-receipt of coal equivalent to the tare difference on a regular basis. Also, tare difference leads to significant over-charging of freight as the delivered coal quantity is lower than the RR quantity.

Request has been made to the Railway Board to measure tare weight of the empties in the in-motion weighbridges during the time of their inward movement and consider that actual tare weight measured on a realtime basis for calculating the RR so that the consumers may get designated quantity of coal for which freight charges and coal value are paid.

As per Railway Notification, distance-based graded concession for transportation of certain commodities including coal and coke was provided at the rate of 20% on normal tariff rate (NTR) for distance beyond 1400 KM to attract additional freight traffic. The concession was valid till 31.12.2021.

Owing to severe disruption/ Non-supply of rakes to the Non-power Sector during that period,

NRS consumers could not avail the benefit of concession. So, Railway Board was requested to extend the distance based graded concession for one more year i.e. 31.12.2022.

Submission to prioritise loading and supply of rakes to long-distance consumers from ECR:

As per the Railway circular regarding Preferential Traffic Order GO 95, the Zonal Railways is obligated to provide special facilities or preference long distarnce consumers (more than 600 Kms) to transport coal and coke loaded from a siding irrespective of priority and date of registration on all days of the week except the two nominated days. However, East Central Railway (ECR) is not giving due priority to the long-distance consumers and supplying indents to the Utilities as per the order of seniority only.

Submission has been made to ECR so that preferential loading and dispatch of rakes to the long distance consumers may be prioritised by ECR in accordance with the Railway circular.

Submission for kind intervention in improving coal supply via Rail mode for Non-regulated Sector including CPPs:

The lack of supply to NRS that started around August/September ‘21 this year, became further arduous in December ’21 as coal stock at many plants plunged below critical level. The condition had shown signs of improvement during November ’21. However, due to high demand at the power sector for building coal stock at the plant ends for the upcoming winter, coal supply to the NRS consumers including CPPs curtailed once again. More than 4500 rakes have been pending during that period.

Request has been made to the Ministry of Railways alongwith other Ministries to ensure that specific quantity (minimum 15% of total coal dispatch by Rail mode) may be earmarked for the Non-regulated sector even during the high power demand scenario.