Consumers' Page

Present Coal Scenario:

In a bid to meet the high power demand across the country, India’s coal producers including National Miner Coal India Limited as well as SCCL and other captive producers continue to ramp up production and despatch to power sector in July as well. CIL has produced 47.33 MT coal this month against monthly target of 53.79 MT which is 11% higher than July 2021. India’s overall production of the dry fuel has also increased at nearly the same rate (11.37%) on a y-o-y basis. Country’s overall coal despatch has grown by 8.5% in July (67.81 MT) compared to the same month last year (62.49 MT) while CIL’s despatch has increased by more than 7% y-o-y. In the ongoing financial year, India’s overall coal despatch is gone up by 13.5% compared to same period in last fiscal. Coal India has achieved more than 95% of its despatch target of July this year.

Issues faced by Power Sector:

Carry forward rakes of Power Utilities:

If the carry forward rakes are not re-indented in time then it would be considered as deemed delivered quantity. Therefore the balance (unlifted) quantity is considered as short lifting and compensation calculation is done accordingly. Request has been made to MoC & CIL so that option can be given to their power customers, if they are not willing to reindent pending rakes they may be allowed to do so without paying any compensation against short lifting. If agreed upon, it would minimise the effort of unwilling consumers to continue reindenting of due rakes every month, on the other hand more numbers rakes may be available for the plants who are in a critical fuel situation.

Submission by Power Sector for immediate release of long-pending rakes booked under Special Forward e-Auctions (SFEA):

Despite a steady supply of FSA rakes from MCL, a large number of Special Forward e-Auction rakes for the Power Sector are pending since long. As per some of the utilities, supply over 550 indents allotted to various power plants under Special Forward e-Auction (SFEA) have been pending from MCL’s Talcher area alone, some of which are pending since September 2021 even as those Utilities have already paid up huge amounts of advances to the coal company. Request has been made to MoC, CIL and MCL to expedite liquidation of SFEA rakes from all CIL Subsidiaries through allotment of pro-rata quantity in the tune of 10%-20% of the total number of coal rakes despatched per day at least till the time high demand eases.

Submission by power Sector (IPPs) to prioritise loading and supply of rakes to long-distance consumers from ECR:

For Case-2 scenario-4 IPPs, situated at a long distance from the mines (more than 600 km), lifting of eAuction coals from NCL and CCL have been severely affected due to huge pendency of indents from East Central Railways (ECR). Also, large quantities of coal lifted by these IPPs are stuck at various good shed sidings of ECR due to short- supply of empty rakes.

As per Railway circular regarding Preferential Traffic Order GO No. 96 effective from 1st April 2022, Zonal Railways are supposed to provide special preference to transport coal and coke loaded from a colliery siding/ washery siding/ plant siding to the plant-ends located at a long distance (more than600 kms) irrespective of priority and date of registration on all days of the week except the two nominated days. While, most of the zonal Railways such as WCR and SECR are giving the priority as per Railway Order, ECR is not doing the same.

Submission has been made to the Railway Board so that preferential loading and dispatch of rakes to the long distance consumers may be prioritized by ECR as well.

Issues faced by Non-power Sector:

Submission by NRS consumers regarding non-movement of coal from private railway siding under RcR mode:

Non-power Sector lifted coal from NCL’s Krishnashila Colliery as per the FSA during January-February this year and moved the quantity to Krishnashila Railway siding (KRSL). However, in spite of having permission for coal movement under Priority-D from the Railways and placing indent under premium freight mode, no rakes could be allotted to them as rake movements have been prioritized for Power Sector. Therefore, the indents allotted to the Industry from NCL got cancelled twice under Priority-D and the whole quantity of coal is still lying in the railway good shed siding.

Request has been made to the Ministry of Coal and Railways so that a special provision could be devised to initiate the movement of coal stuck at the railway siding to the respective plant-ends at the earliest possible.

Submission requesting supply of coal as per Annual Contracted Quantity (ACQ) instead of trigger level and allow increase in number of rakes to NRS FSA consumers:

Despite increase in coal demand, NRS Linkage Auction consumers are still being allocated coal at trigger level (75% of ACQ) by the CIL Subsidiaries mostly via road mode. This 75% capping has been defined in the Fuel Supply Agreement (FSA) to determine the threshold of Compensation for short delivery/lifting in case of crisis for a few months by either side (buyer/ seller). This should not be considered as a final scale for allocation of coal for a longer period to the Non-Power Sector (including CPPs).

Request has been made to MoC and CIL so that coal may be supplied to the NRS FSA consumers as per 100% ACQ instead of supplying at trigger level. As the prior critical condition of the Power Sector has improved, increase in number of rakes supplied to the Non-power Sector may kindly be allowed, commensurate with their normative requirement.

Submission for refund of balance coal value without forfeiture of EMD from ECL for NRS Consumers:

Certain NRS Consumer procuring coal from Eastern Coalfields Limited has stated that they are not able to lift booked quantities under Spot e-Auction due to irregular production of coal at Chitra AOC and for not allowing 14- wheeler trucks at the mine-end for lifting. As per e-Auction norms, Coal Company may forfeit the EMD amount submitted by the consumers as bid security in case of short-lifting but in this case the customers are not responsible for unlifted quantity as production in the mine was irregular. Request has been made to ECL so that coal value of the balance/unlifted quantity may be refunded to the consumer at the earliest possible without deduction of EMD amount.

Submission for waiving off compensation claim of WCL for short-lifting in Tranche - III & IV NRS Linkage Auction for consumers who exercised ‘Exit Option’ from FSA following revision in WCL coal price:

Compensation claim of approximately Rs.7.89 Cr for short- lifting in Tranche III and Tranche IV was made by WCL from JSW Steel Ltd. However, following revision in Grade-wise notified price of coal by WCL for Non-Power Sector from Mine Specific Sources during November 2019, the company had opted to exercise the “Exit Option” in accordance with the WCL Notice and accordingly, advance coal value and Financial Coverage BG submitted by the consumer against tranche IV NRS Linkage auction were also refunded by WCL. In another case related to Tranche-III, WCL allowed change of mode for coal lifting from Ballarpur sidings from Rail to Road for three months (April, May and June 2019) due to unavailability of rakes. In spite of JSW’s appeal for approval well in time as per the FSA, no further extension in change of mode Rail to Road was permitted by the coal company from the same siding. MSQ advance deposited by the consumer for Tranche III has been kept on hold by WCL against compensation claim despite no fault of the consumer. Request has been made to WCL for reviewing the short lifting compensation claims against JSW Steel Ltd as the company availed ‘exit option’ from the FSA which was accepted by the coal company. Also, the pending performance security BG and advance amounts deposited by the consumer should not be adjusted against short lifting compensation claims.

Request for supply of rakes by NCL against pending allocations for Linkage auction FSA

A significant number of rakes allotted to the Nonpower Sector as per Linkage auction FSA by NCL, have been pending since last year. Such a huge pendency of allotted rakes is further aggravating the coal crisis faced by these Industries amid already restrictive allocation and supply. Request has been made to NCL and CIL to expedite release of rakes against pending allocation by the coal company.

Submission by NRS consumers requesting reissuance of sale-order for coal booked from Magadh OCP of CCL by under Spot Auction:

Non-power Sector who booked G-13 (-100 mm) grade coal from Magadh colliery of Central Coalfields Limited (CCL) through Spot e-Auction dated 15.03.2022 but could not lift the same immediately as issuance of sale order was delayed until late April. Subsequently, coal grade at Magadh OCP changed from G-13 to G12 in April 2022 and willing consumers to submit the differential amount of total coal value as per the revised grade within stipulated time. However, CCL had withdrawn the facility of re-issuance of sale orders of the changed grade on 22.06.202 by stating technical constraints. Amid scare supply of coal to NRS consumers especially via Rail mode, cancellation of sale order under Spot e-Auction has further aggravated coal crisis among Industries. Request has been made to consider re-issuance of sale-order from Magadh OCP of CCL for concerned NRS consumers against the Spot Auction held in March ’22.