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Consumers' Page
Present Coal Scenario:
State-owned Coal India Limited has produced 39.20 million tonnes of coal in June-2020, slightly less than the figures of the previous month (May’20) as monsoon shower disrupted operations in various parts of the country. The June production figure registered a decline of 12.8% on a y-o-y basis compared to 44.95 million tonnes in June’2019. For the period of April’20-June’20, the national miner has produced a total of 121.01 million tonnes of coal, lower by 11.6% compared to 136.94 MT produced in the corresponding period of previous year. Total coal offtake of this month also dipped by 15% to 41.61 MT, compared to 48.98 MT in June-2019. Total offtake figures for the period of April’20- June’20 stands at 120.62 MT, which is more than 21% lower than the offtake quantity of 153.49 MT in the same period last year amid the dipping demand from the Power Sector.
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1. Streamlining of all forms of refunds
by CIL Subsidiaries: Considering the financial crisis across all sectors amid the pandemic outbreak, Requests have been made by consumers from both sectors to consider immediate return of all kinds of refunds including security deposits, BGs, GST, CST, pending coal value etc. Consumers, who have surrendered linkages after the lock-in period, have requested their Bank Guarantees to be returned by the Coal Companies. Following the CIL directive, most of the Subsidiaries have started taking initiatives to streamline the refunds to the concerned companies.
2. Request for not imposing penalty for
short lifting: Power demand has remained low in the post lockdown period, enabling many power producers to function at low PLF. So representations were made to CIL for not penalising Power sector consumers for short lifting of allotted quantity under the FSA during this period of crisis. Necessary amendment to the FSA provisions is also requested so that coal companies not supplying coal through primary/ secondary sources may also attract penal charges.
Weighment related issues faced by both Power and Non-power sector:
3. Request for bi-directional weighment facility in the in-motion weigh
bridges: Many old weighbridges lack the facility of weighment in bi-directional mode. So instead of measuring tare weight of wagons before every transport, weight printed on the wagons is considered. However, the tare weight of wagons increases with time due to rusting, deposition of coal fines and other materials. Therefore, considering the printed tare weight led to consumers receiving less coal. Consumers across the board requested MoC and CIL to ensure that bi-directional weighment facility is provided in the in-motion weighbridges either by modifying them or by replacing the old weighbridges with latest RDSO approved newly designed weighbridges in a phased manner.
4. Request for processing refund for under loading of rakes based on Per
missible carrying Capacity: Consumers often have to pay large amount of punitive charges in case overloading of rakes. Though there is a provision of refund by coal companies in case of under loading of rakes, consumers do not get the full amount refunded as Coal Companies pay under loading charges limited to the difference of stencil capacity and actual weight of coal loaded in the wagon. But Railway charges freight as per Permissible Carrying Capacity/ chargeable weight, which is higher than stencil capacity. Submission has been made to MoC and CIL requesting change in FSA provision of refund on account of under-loading in line with Railways circular based on PCC instead of stencil capacity / CC.
5. Appeal for reviewing FSAs for reassessment of ACQ for FY 2020-21:
Due to persisting lockdowns in many parts of the country, power demand may continue to be low in the coming months. CIL is requested to kindly review the FSAs of the Power Utilities so that the consumers can reassess their present requirement and percolate the same appropriately for 2020-21. Reassessing of FSAs would also help the coal companies to cater to the demand of other Power plants / Industries running at higher PLF. A committee has been formed in this regard comprising of CIL authorities, officials from the Subsidiaries and representatives of the major stakeholders from Power sector.
6. Issuance of credit notes against
supply of ungraded coal: Though there is a provision for issuing credit notes in case of ungraded coal in the FSAs for the Power sector consumers, but the refund is not being processed since long. A new policy in this regard may be framed. Requisite respite is urgently required by the Power sector.
7. Request for not supplying coal beyond MSQ without buyers’ consent: Pending rakes are often being sent to the consumers at one go in order to clear the backlog when coal is available in abundance. As a result, NRS consumers, who are already suffering from acute financial crunch due to lockdown
and have abundant coal stock in the sidings, are forced to cancel the rakes. Request has been made to CIL by NRS consumers to make necessary policy amendments so that the Subsidiaries do not send coal of more than 20% above MSQ without buyers’ consent. CIL has taken the initiative and Railways has also consented to supply the coal rakes to the willing consumers and deferring the rakes of the unwilling consumers due to the pandemic situation.
8. Request for Continuing temporary dispensation for change of mode of
supply from Road to Rail: The consumers having FSAs through linkage auction route, have requested for temporary dispensation from Road to Rail have requested the same to continue at least till September this year. As road transport is affected due to persisting lockdown in parts of the country. CIL had initially allowed change of mode form Road to Rail for orders booked under Special Forward E-auctions and FSAs through NRS Linkage Auction Route for three months (AprilJune2020), which has been extended for another three months (July-September 2020).
9. Request for keeping Notified price of coal for NRS consumers at par with
Power sector: Notified price of coal to NRS consumers is higher by 20% compared to Power sector consumers. This puts extra burden on Non-regulated sector which is already reeling under financial pressure. Request has been made to CIL for bringing the notified price of coal for NRS consumers at par with the price for Power sector consumers. The submission is still under consideration.
10. Issuance of credit notes for un
graded coal: There is no provision for issuing credit notes in case of ungraded coal in the FSAs for NRS consumers. Therefore, they are unable to get long pending refunds through credit notes against supply of ungraded coal. Request has been made to formulate a suitable policy framework so that credit notes can be issued for the NRS consumers in case of ungraded coal in line with the power sector.
11. Request for clubbing of FSAs for
operational convenience: Many major plants from the Non-regulated sector have large number of FSAs with a specific Subsidiary. This causes the plants to provide a substantial amount of working capital for payment of advances to the coal companies for existing FSAs. CIL is requested to bring amendments in respective policy guidelines regarding FSA provisions for Subsidiary-wise clubbing of contracts so that cash along with BG and LC are consolidated for operational convenience of these consumers.
12. Issues with coal pricing in WCL
mines: The sudden price hike in 11 major WCL mines in early November’19, has made it difficult for NRS consumers to source coal from the Subsidiary as they had already paid a high price during Tranche IV auctions. NRS consumers have requested CIL and WCL to kindly resolve this long-pending issue as they are unable to bear burden price hike especially during the economic downturn. *Consumers have requested for ‘Safe Exit Clause’ to be provided to consumers willing to exit from their existing FSAs in view of the revised prices without any punitive actions/ charges immediately as promised by WCL in previous meetings. WCL authorities have allowed provision of safeexit to the unwilling consumers who wish exit from their respective FSAs. * Request has been made by consumers who are solely dependent on WCL coal, to roll back the elevated coal price or at least consider reducing the hiked price to the extent possible. *Consumers have requested WCL to offer coal from a mixed basket of sources comprising of mines with both higher and lower priced coal as promised by the Subsidiary in the previous meetings, in order to reduce burden of coal price hike considerably. The two above submissions are being considered by CIL but nothing concrete has been received by the consumers so far.
