Consumers' Page

Issues of both Power & NRS Consumers:

Consumers' views on Mode Agnostic Single-Window Auction:

The decision to conduct Single Window Modeagnostic Auction will be beneficial for the consumers in terms of offered quantity as the entire quantity in excess to FSA commitment will be put in a single basket for offering in auction. Also, this auction will bring a market driven uniform price for all grades of coaland will facilitate the process of migrating coal sector to market determined prices.However, the Single window Auction will bring in coal traders and consumers on the same auction platform which may lead to some disadvantages for the coal consumers as listed below: * The objective of procuring coal through e-auction by consumers and traders is juxtaposing each other. Special Forward and Exclusive e-Auctions had been initiated considering that consumers may not get equal standing in auctions combining traders. Therefore, absence of these auctions may lead to a lack of coal supply for many consumers. * Sourcing coal over and above linkage quantity through single window auction is likely to be more costly making the cost of power generation dearer. *The cost of power generation plays a vital role in merit order of the plant and any increase in cost of generation due to excessive cost of coal in an auction will adversely affect scheduling of the plant for generation.

* securing coal through a single window auction will not ensure the required quantity of coal supply to the industrial plants as the unlifted quantity will lapse after 45 days in case of road mode supply and after three months in case of supply through rail. * In Single-window Mode-Agnostic auction, the default mode of supply is via rail. However, rake movement for the Non-power Sector has been restricted over the last 8-9 months. Therefore, procuring coal via the said auction may lead the NRS consumers to uncertainty unless the supply of coal rakes for the Industries normalises.

Submission has been made to the Ministry of Coal and CIL to continue with the previous e-Auction policies such as Special Forward e-Auction for Power Sector, Exclusive e-Auction for the Non-power Sector and Spot e-Auction for all sectors including traders. A number of Subsidiary Coal Companies of CIL such as ECL and CCL are providing refunds against idle freight along with GST components charged by the Railways. However, some of our valued member companies from the Power Sector have stated that certain CIL Subsidiaries – MCL, SECL & WCL are not providing refunds of differential GST amounts while providing reimbursement for idle freights. As the Generators are paying freight charges to Railways alongwith GST, non-refund of such significant amounts for an indefinite period is leading severe financial losses for these utilities. Therefore, intervention of MoC and CIL is requested so that differential GST amounts may be refunded to all CUIL Subsidiaries while providing refunds on account of underloading.

Issues faced by Power Sector Consumers:

Submission by Power Sector requesting refund of Ad-valorem charges in credit notes against grade slippage:

A number of Power Sector consumers have pointed out that Ad-valorem taxes such as Royalty, DMF, NMET, etc. paid by them along with advance coal value are not included in the credit notes issued by respective coal companies. It may be noted that combining all the ad-valorem taxes amounts to a significant portion of the total coal cost paid by the Power Generators towards procurement. Request has been made to MoC so that all CIL subsidiaries may include these amounts related to Royalty and Ad-valorem taxes during the issuance of credit notes against grade slippage.

Submission by Power Sector regarding refund of differential GST amounts along with reimbursement for idle freight:

Issues faced by NRS Consumers:

Request for condoning Tranche V Sponge Iron Sector customers whose LoIs were canceled, to allow them to participate in Tranche-VI of the same sub-sector:

Some of the Sponge-iron sector consumers have been debarred from participating in the upcoming linkage auction tranche for the Nonpower Sector for non-signing of FSAs (TrancheV) with the subsidiaries in spite of being successful bidders.

*The consumers had submitted the requisite bank guarantees within the stipulated time in addition to the bid security as per the scheme document but they were not in a position to sign the FSA due to a sudden drop in production, supply chain disruption, and economic downturn following the sudden outbreak of COVID-19 during that period.

*During the period of signing of FSAs, no direct clause of debarment was in vogue as per the scheme document of Sponge-iron Sub-sector (Tr-V). The decision was left to the discretion of CIL as per 5.5.2(c) and 5.5.3 of the FSA. * The consumers who have not signed the FSA with the respective subsidiaries have also compensated the seller through forfeiture of their security deposits as well as process fee by the respective coal companies. So debarring them from participating in the upcoming Tranche will be doubly penalising them for not being able to sign the FSAs. *The NRS Linkage auction for Sponge-iron sector is being conducted after a prolonged gap of three years. If the Subsequent tranches after Tranche-V were conducted at regular intervals, then these consumers would have faced the consequence long ago. Request has been made to MoC and CIL to condone these consumers only once considering the pandemic situation and allow them to participate in Tranche VI Linkage Auction for Sponge Iron Sector.

Suggestions of NRS consumers on Tranche-VI NRS Linkage Auction, raised at the Pre-Linkage auction consumer conference:

Following requests have been collated and conveyed to MoC and CIL on Tranche-VI NRS Linkage Auction: *Request to review proposal for limiting validity of allotted rakes to 90 days amid ongoing coal supply crunch to NRS as supply of coal via rail mode is still meagre. On many occasions, supply of the allotted quantity is taking more than 180 days for rail mode and 120 days for Railcum-Road (RcR) mode. At this rate, a proposal to limit the validity of rakes to 90 days would lead to lapsing of several rakes for the NRS and lead to an acute coal shortage. * Many coal blocks allotted to the industries are under either Captive or Commercial Sale regime which is under various stages of development. Therefore it is requested to re-introduce a twoyear lock-in period so that the bidder has option to exit from the Linkage Auction FSA when they achieve peak rated capacities from their mines. * Request has been made to eliminate the policy of submitting 7 days equivalent coal value and 10 days equivalent coal value BG to the respective coal companies in case of Railway supplies where payment has been made through LC. * Request has been made to consider existing Syn-gas and producer gas plants under the newly formed sub-sector for Coal Gasification so as to participate within Tranche-VI Linkage auction. Also, CIMFR may be asked to revise the Norms for CGP-based DRIs and also formulate a new Norm for Gasification units producing Syn-Gas for distribution or making downstream chemicals under the newly formed Coal Gasification Sub-Sector under NRS..

Appeal by NRS Consumers to increase supply of coal via rail mode:

In spite of noticeable improvement compared to previous months, the coal supply scenario to the Non-power Sector, especially via rail mode, is still languishing far below the required level. Owing to severe curtailment of coal supply via rakes, many Industries including continuous process plants had to convert the mode of supply from rail to road in order to sustain their plant operations. Converting rail quantity to road offtake may often lead to a higher premium for coal which may be more than the premium paid to CIL for supply via rail mode. Request has been made to MoC and CIL so that the number of rake supplied to the NRS consumers may be increased at the earliest possible. It is also requested that in line with the modalities of the mode-agnostic single-window auc-

tion, Rail to Road conversion may be considered without change in premium so that the consumers do not have to bear the additional expenditure.

Request to commence Tranche-VI NRS Linkage Auction for Sponge-iron sub-sector after 4-5 days from the scheduled date:

The consumers only had four working days to complete the necessary formalities as the scheme document and offer Schedule of the Tranche-VI Linkage Auction has been released on evening 16.12.2022 and the scheduled date for the commencement of auction was on 23.12.2022.

Request has been made to CIL to postpone the auction commencement date by 4-5 days so that the interested consumers may take part in the upcoming tranche.

Submission by consumers from Sponge-iron sub-sector to increase the offer of coal from various CIL Subsidiaries in Tranche-VI NRS Linkage Auction:

It has been pointed out by many consumers from the Sponge-iron Sector that offer of coal from different CIL Subsidiaries in the upcoming linkage auction is less than the quantity required for smooth functioning of their plants. Following requests have been made by the consumers to increase coal offers from different CIL Subsidiaries in the Tranche-VI Linkage Auction:

a. It is requested to increase the offered quantity from ECL to at least 5 lakh tonnes.

b. It is requested by consumers from the sector to double the offered quantity of coal from Subsidiaries like WCL, MCL, CCL and NCL as the current offer is much lower than the quantity of coal required from these areas.

Issue related to Railways:

Submission by coal consumers for consideration in the change of policy for coal programming of rakes under Priority ‘C’ and ‘D’ for the year 2023:

In reference to the meeting conducted by the Office of the Director of Eastern Railway on 02.12.22, regarding coal programming policyrelated issues for 2023 under Priority ‘C’ and ‘D’, following suggestions have been given for the change in requisite policy guidelines: * Request has been made to incorporate a provision in the software system so that coal companies can provide their lifting certification online against the online submitted programs. * As per the guidelines for outward booking of non-programmed coal from nominated goods sheds/sidings/PFTs under Priority-D during the year 2022, at present the consumer is required to apply manually along with all coal documents for such quantity. Their application may include residual coal against previous coal programmes in their credit. Request has been made for provisioning for online submission of application for program of balance quantity less than rake size (3894 MT). * Presently the sanctioned programs are lapsing within 60 days. Consumers have requested that necessary modifications in the policy may kindly be considered so that the program once sanctioned should not lapse and remain valid till it is supplied. .