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Consumers' Page
Present Coal Scenario:
Coal production figure by national miner Coal India Limited has grown to 64.3 MT in February ’22 from 60.2 MT in the previous month. CIL’s overall production figures this moth has grown by 3.9% compared to the same month last year (61.9 MT). Among the Subsidiaries, NCL has registered highest growth in production on m-o-m basis while ECL has registered the highest decline. In terms of cumulative production figures of CIL for FY 2021-22, the Maharatna Company has produced 542.4 MT which is 5.3% higher than the 515.1 MT produced during the same period of last fiscal.
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CIL’s coal offtake figure for February (57 .4 MT) declined slightly compared to January (60.7 MT). However, on m-o-m basis offftake for Feb ’22 has grown by 15.7% while the overall offtake for the ongoing fiscal (599.9 MT) has also grown by nearly 17% compared to the last financial year.
Issues faced by both Power and NRS Consumers:
1. Submission for release of various forms of long-pending refunds from different CIL Subsidiaries:
Various forms of refunds from different Subsidiaries of CIL 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 are pending since long. In case of strapped BGs, consumers are unable to secure required credit
limits from their Banks to carry out regular plant operations comfortably. Due to this blockage of fund and lack of cash flow in the market, many consumers are facing difficulties in taking part in the future auctions to procure coal in order to sustain their operations.
Request has been made to Ministry of Coal, CIL and the respective Subsidiaries to immediately commence the process of releasing long pending refunds to the consumers from both Power and Non-power Sector. A list has been prepared regarding subsidiary wise details of various forms of pending refunds and sent to CIL and its Subsidiaries.
2. 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 including the Washery Grades have been increased multiple times in the ongoing financial year. SCCL coal prices for different grades of coal have been revised 5 (five) times in total in the FY 2021-22. Such a recurrent and steep hike in coal prices is putting a huge financial burden on the coal consumers dependent on SCCL.
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.
3. Submission by Power Sector regarding short-receipt various sidings of NCL:
Consistent short-receipt is being observed in Rail mode supply of coal booked under FSA from SPUR-II sidings of NCL in February '22. Short-receipt to the tune of 2% is being observed in nearly 90% of the rakes supplied from this siding which is leading to significant financial loss for the consumers as they are not getting the quantity of coal for which payment has been made against the bill. Request has been made to NCL to take up adequate steps including recalibration of the weighbridges to eradicate the short-receipt of coal.
4. 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. Supply of lower grade coal leads to lower capacity utilization and in turn increases the overall cost of power generation. Also rakes supplied from various sidings of NCL have quality issues as the coal is mixed with oversized stones and boulders which reduce the plant efficiency and increase ash load in the downstream. Further this 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.
Issues faced exclusively by NRS Consumers:
5. Submission by NRS consumers regarding prolonged supply crunch of in-
digenous coal from Coal India Limited (CIL) especially via Rail Mode:
Coal supply scenario to the Non-Power Sector has deteriorated following brief revival during November ’21 due to further curtailment in supply by Rail as well as Road and Road cum Rail (RcR) modes since the last few weeks causing Industries like Aluminum, Cement, Steel, Sponge-Iron, Paper, Fertilizer, Chemical, Rayon, Textile etc. and their Captive Power Plants (CPPs) to face an unprecedented coal crisis. Coal requirement of the Non-regulated Subsectors 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 lower than 3 lakh tonne / day which is less than half of their daily coal requirement. Moreover, more than 4,000 FSA and e-Auction rakes have been pending in total so far. Supply through Road mode is highly inadequate and economically unviable for sustenance of NRS Consumers. Also, as supply through RcR mode to the Power sector has been prioritized owing to high demand, supply to the Industries even via RcR or Road mode has also shrunk significantly. High-cost of imported coal coupled with expensive ocean freight rates, makes it financially unviable for most of the consumers to depend on imported coal. Also, barring a few plants, most of the boilers, kilns and furnaces are designed to run mostly on indigenous coal. A detailed joint submission has been made alongwith other Association including Alu-
minium Association of India, Confederation of Indian Textile Industry, Indian Captive Power Producers Association, U P Paper Mill Power Plant Owners Association, Sponge Iron Manufacturers Association, The Fertiliser Association of India, Vidarbha Industries Association
Hon’ble Prime Minister’s Office, Ministry of Coal, Power, DIPP, Steel, Railways, and Coal India Limited to ensure a justified ratio of coal allocation between Power Sector and Industries so that the consumers are not deprived of their legitimate entitlement and could continue their production economically for delivery of goods at affordable price.
6. Submission by NRS Consumers with linkages for supplying coal via Rail mode and conducting Exclusive eAuction from various CIL Subsidiaries:
NRS Consumers were suffering due to non- supply of coal via Rail mode from certain CIL Subsidiaries despite high coal demand among the Industries (including CPPs). Also, Exclusive, e-Auction for NRS Consumers have been stalled from most of the Subsidiaries (except Steel grade coal from BCCL). Though Spot auctions are taking place, NRS Consumers are compelled to procure coal from open market by paying extensively higher costs. Also, procurement of coal via Road Mode involves additional transport charges which increases the overall cost of operations. Request has been made to the Ministry of Coal, CIL and Subsidiaries to immediately offer coal rakes and increase present supplies for NRS Consumers having linkages with various CIL Subsidiaries-especially NCL, CCL & WCL at present. Also, the authorities have been requested to conduct Exclusive e-Auction for the Non-power sector.
7. Submission by NRS Consumers for increasing supply of rakes as well as 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 immediately from CIL Subsidiaries-especially where sup-
plies are almost stalled from NCL, WCL, ECL & CCL. Also request has been made so that a window of dispatches for NRS Consumers may be permitted in close circuit.
8. Submission by NRS Consumers for supply of coal as per MSQ and providing e-Auction rakes without deposition of fresh advance from MCL:
MCL vide Notice no. 646 dtd 31.01.2022 decided to allocate coal at trigger level which is 75% of the Monthly Scheduled Quantity (MSQ) in case the FSA is signed under Linkage Auction instead of supplying the quantity according to MSQ. It is understood that such limited supply would lead to even greater coal supply crunch to the Industries amid the ongoing crisis which may cause production cuts and even closure of many industrial plants. a.Request has been made to MCL and CIL to ensure supply coal as per MSQ to Non-regulated Sector FSA Consumers.
b.It is requested that advance payment to be made by the NRS FSA consumers to the coal company may not be higher than coal value equivalent to MSQ of one month. c.Submission has been made to MCL and CIL for liquidation value-paid rakes to the Industries which are pending since long and NRS Consumers are allowed to participate in the upcoming auctions without depositing fresh advance as coal value.
9. Submission by NRS consumers regarding planned allotment of value-paid rakes by ECoR:
Rake allotments are not given by the East Coast Railways (ECoR) against the offer given by Mahanadi Coalfields Limited (MCL) from its Talcher area for the month of January ’22. Rake allotments are not given by the East Coast Railways (ECoR) against the offer given by Mahanadi Coalfields Limited (MCL) from its Talcher area for the month of January ’22. Request has been made to East Coast Railways for ensuring allotment of rakes against offers in a planned manner so that lapsing of rakes could be avoided.
10. Submission by NRS Consumers for immediate issuance of pending RDOs and release of arrear rakes from SECL:
Road Delivery Orders (RDOs) are not being issued to the NRS Consumers in spite of having multiple FSAs with SECL and paying the entire coal value well in advance. In some cases, RDOs are not being issued from different dispatch points of SECL since the last 4-5 months leading to pendency of significant RDO quantities. Request has been made to CIL and SECL to immediately issue the pending RDOs against the FSA and e-Auction quantities in order to regularize supply of coal to the Industries via Road mode considering the dismal supply situation via Rail to the NRS Consumers.
demand in the Power Sector. At a certain point supply of rakes to the Industries was stopped as well.
As the NRS consumers could not avail the benefit of concession provided by the Railways due to lack of rake supply, request has been made to the Railway Board to extend the distance based graded concession for one more year i.e. 31.12.2022.
