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Consumers' Page
Present Coal Scenario:
National Miner Coal India Limited (CIL) has produced 53.47 MT coal in April 22 against a monthly target of 56.70 MT. The production figure has grown exponentially over (27%) compared to 41.89 MT produced in the same month last year. In the first month of the new fiscal, CIL's despatch has been 57.50 MT which is 6% higher than CIL's monthly despatch quantity of 54.24 MT. Among other coal companies, SCCL's production has also grown from 4.86 MT in April '21 to 5.32 MT in April '22 (9.5%). coal production by captive blocks has spiked to 7.79 MT this month compared to 4.87 MT during the same month in last fiscal.
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Submissions for both Power and NRS consumers:
1. Submission for release of various forms of long-pending refunds from MCL and SECL:
Various forms of long-pending refunds from Mahanadi Coalfields Limited (MCL) and South –Eastern Coalfields Limited (SECL)including refund of additional coal value advance, BGs related to financial coverage and performance security, pending credit notes on account of grade slippage, refund of security deposit against expired FSAs etc have been piled up for many months.
In case of strapped BGs consumers are unable to secure required credit limits from their Banks to carry out regular plant operations comfortably.As a result, huge amounts of funds of both Utilities and Industries are stuck with MCL.
Request has been made to MCL, SECL and CIL for release of these long pending refunds.
2. Submission to prioritise loading and supply of rakes to long-distance consumers:
As per the Railway circular regarding Preferential Traffic Order GO No. 96 whichcame into force for a year starting from 1st April 2022, the Zonal Railways is obligated to provide specialfacilities or preference to transport coal and coke including all variants (except petcoke) in case of a long distance (more than 600 kms) irrespective of priority and date of registration on all days of the week exceptthe two nominated days. East Central Railway (ECR) is not giving due priority to the long- distance consumers despite representations from the Power companies. Request has been made to ECR and Railway Board to intervene so that preferential loading and dispatch of rakes to the long distance consumers may be prioritized by ECR in accordance with the circular.
3. Submission for rectifying supply of stones and extraneous materials mixed with coal fromvarious sidings of ECL:
Consumers from both Power and Non-power Sectors have stated that poor-quality coal mixed with large-sized stones and boulders are being supplied from various sidings of ECL including UKA IV (Bankola II) sidings. Supply of large amount of extraneous materials with coal on regular intervals is causing less grade materialization and receipt of lesser quantity in terms of heat value.
Request has been made to ECL and CIL to ensure supply of allotted grade of coal free of stones and boulders.
4. Submission to SECL regarding continuation with single LC against coal supply through Rail and Road mode:
So far, the 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 needs to be issued for separate modes of dispatch (Road or Rail mode). Many consumers have to avail both modes of transport (Road/Rail) for convenience of coal supply at their respective plants. Hence, issuance of separate LC for separate modes would be financially difficult as well as cumbersome for them.
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.
.5. Submission for continuing supply
of crushed coal of (-) 100 mm size instead of (-) 250 mm to the Power plants via road Mode:
SECL has decided to expedite despatches of crushed coal of (-)100 mm size to the power plants via Rail mode in order to maintain sufficient coal stocks at the plant-ends ahead of the peakdemand season. However, as per SECL Circular No.SECL/BSP/M7S/ PH/RS/64, in all live Road Delivery Orders (RDOs) issued to Power sectorconsumers under their respective FSAs, the size of coal to be supplied has been changed from (-) 100 mm to (-) 250 mm coal 18.04.2022 onwards. Most of the power plants are designed for pulverized coal therefore, coal crushing infrastructure at the power plants are equipped to handle (-) 100 mm coal. So, supply of bigger sized coal to the Utilities would increase power consumption at grinding mills. This will increase cost of crushing, enhance dust pollution and make downstream in-plant coal handling operations difficult. Request has been made to SECL to ensure supply of
crushed coal of (-) 100 mm size to the power plants through Road mode as well.
6. Submission by Power sector regarding supply of lower grade coal and high short-receipt from ECL sidings:
Certain power Utilities procuring coal from Salanpur and Mugma sidৈings of ECL has complained regarding supply of significantly lower grade coal as compared to the grade mention in the FSA (5-8 grade lower) during March and April’22. Also, there are numerous instances short-receipt in rakes dispatched from those two ECL sidings. Request has been made to ECL to atleast minimise grade slippage the problem of grade slippage in order to eradicate them and also look into the issue of consistent short-receipt so that proper quantity and quality of coal can be supplied to Power consumers as per the billed grades.
Submissions exclusively for NRS Consumers:
7. Prayer by the Industries (including CPPs) for a suitable solution to ease out ongoing scarce supply of coal:
In spite of increased industrial activities and consequent upsurge in coal demand in the Industrial sector, despatch of coal to sectors like CPP, Steel, Cement and Sponge in the ongoing fiscal has reduced by more than 32%, 27%, 14% and 20% respectively compared to the previous fiscal. The supply has been further curtailed due to longpending FSA and e-Auction rakes (more than 4000 rakes), longer intervals between auctions conducted for Industries, offer of less quantity under Exclusive and Spot Auctions and supply of linkage coal as per trigger level (75% of MSQ) instead of scheduled quantity. The situation has aggravated to such a level that may compel some of the Industries to cut-down on production or force closure. Such impediments in coal procurement may adversely impact the manufacturing sector. Joint submissions have been made by a number of Associations including CCAI to the PMO, Ministry of Coal,Power, DIPP, Steel and Railways to expedite supply of coal to NRS consumers especially via rail mode for the smooth running of plants.
8. Submission by NRS Consumers regarding refund of EMD, Royalty and Ad-valorem taxes against lapsed DO quantities:
Industries securing coal under Spot e-Auctions from SECL’s Chhal, Bijari OCP in 2021, could not procure the allotted quantities due to various reasons such as non-availability of designated grade of coal (G-10, G15), frequent breakdown of weighbridges, irregular movements of loading vehicles, poor coal evacuation arrangements etc. As a result, only a small portion of the allotted DO quantities could be lifted by these Industries and the rest quantity got lapsed despite high coal demand. However, the EMD amount submitted by the consumers has not been refunded for many months. For certain NRS consumers, coal value against the lapsed DO quantities has been refunded by SECL but Ad-valorem charges including Royalty, DMF, NMET, AVAP taxes depositedalongwith coal value has not been refunded.
Request has been made to SECL and CIl to expedite refund of EMD, Royalties and other Ad-valorem charges against lapsed DOquantities.
9. Submission by Industries to immediately improve supply of rakes from MCL:
Despite soaring coal demand in the Industrial Sector, MCL has dispatched 8.4 rakes to the Non-power sector per day on an average in March '22 which was only 9.6% of total rake dispatch by MCL. It is also 10 rakes less than the coal company’s despatch to NRS consumers during the same period last year when the demand was relatively lower. Request has been made to MCL and CIL to supply more number of rakes to the NRS Consumers on a daily basis.
