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Present Coal Scenario:
India’s overall coal production has dipped slightly in June to 67.59 MT from 71.30 MT in May. However, the overall coal production grew significantly by 32.5% compared to same month last year. CIL’s total production has grown by over 28% on an m-o-m basis. The growth has been helped by coal production in captive blocks which has more than doubled in last one year. Country’s overall coal despatch so far in the ongoing fiscal is 224.35 MT which is nearly 15% higher than the same period last FY. Coal despatch by CIL has grown by 10.70% so far in FY 22-23.85% of the coal has been despatched to Power Sector owing to high power demand. Despatch to power houses has grown by 22.3%. Coal despatch to Steel and CPP sub-sectors have grown in this fiscal so far by 35% and 6.6% respectively while rest of the sectors have dipped. Despatch to CPP sector has dipped by 36% in the ongoing fiscal.
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1. Submission for roll back of hiked price in different grades of coal by SCCL effected from 01.06.2022:
The basic prices of different grades of Run Of Mine (ROM) coal for Power Sector has been hiked seven times and for Non-power Sector six times by SCCL since August ’21. The prices of washery grade coal have also been hiked four times by SCCL during the aforementioned period. Also, Additional Facility Charges of Rs.100/tonne for JVR CHP shipping point and Explosive Cost Adjustment Charges of Rs.135/ tonne on all grades of coal have been introduced since 13.05.2022 which have been revised on 01.06.2022. Additionally, the Fuel Surcharge levied on per tonne of coal has also been revised multiple times in the last one year. Request has been made to the Ministry of Coal and SCCL so that coal prices notified by SCCL on 01.06.2022 may be rolled back and levied additional charges on coal may also be reduced to the extent possible by the coal company.
Issues faced by Power Sector Consumers:
2. 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.
3. Submission by Power Sector for loading of rakes as per trigger level MSQ:
Power Sector consumers have pointed out that supply of rakes from ECL to their company have been significantly lower than the trigger level MSQ in recent months despite already paying up full advance against coal value worth crores of rupees. Restriction/curtailment of loading of rakes programmed as per trigger level MSQ during a month leads to accumulation of backlog rakes which need to be loaded in the subsequent quarters. This may lead to levy of short-lifting penalty on the consumers at the end of the year as procuring such a large number of rakes may not be possible at that point. Request has been made to ECL and CIL to ensure loading of rakes as per trigger level to the Power Sector so that coal requirement by the Utilities may be fulfilled.
4. Submission for considering changes in policy for handling and disposal of washery rejects to lower approval time:
Amid the exponential rise in power demand, on lifting the coal rejects from washeries for use in AFBC/ CFBC boilers and for blending suitably in PF based power plants in a hassle-free and time bound manner has become essential. As per the new policy for handling and disposal of washery rejects introduced on 27th May, 2022 by MoC, the approval time for disposal/lifting of washery rejects have increased from 3 days to almost 1-2 months due to various additional steps required to be followed for grant of appropriate approvals. Such inordinate delay is hampering the motto of ease of doing business for the stakeholders. Request has been made to Ministry of Coal for revisiting the policy and making necessary amendments to ensure expeditious approval for the washeries for disposal of coal rejects.
5. Submission for allowing Usance Letter of Credit (LC) mode of payment against supplies by Road from NCL:
Power Sector consumers having valid FSAs with Northern Coalfields Limited (NCL), LC mode of payment is only being allowed for supplies via Rail mode while in case of Road mode supply advance coal value has to be deposited by the Utilities. Non-applicability of the LC mode of payment via Road mode is leading to blockage of funds in the form of MSQ advance. It also dilutes the very purpose of introducing LC payment mechanism to provide financial respite to the coal consumers across the board. Request has been made to NCL so that payment through Usance LC may be allowed for road mode consumers as well.
6. Submission by IPPs for extension of RDO validity through Road/RcR mode against additional coal offers from NCL:
Validity of Road Delivery Orders (RDOs) has been extended by NCL against additional offers under
Round II of 2021-22 and Round I of 2022-23 through Road/RcR mode for the Power Sector consumers till 31.07.2022 as per CIL directive. However, the facility is only extended for Government Utilities while RDO validity for IPPs procuring coal from NCL has not been extended despite significant portion of allotted quantities being unlifted by IPPs from a number of NCL mines such as Dudhichua. Request has been made to NCL to extend the validity of RDOs till 31st July for the IPPs as well so that entire allotted quantity may be lifted by them.
7. 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 than 600 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.
Submission by NRS Consumers:
8. Submission regarding increasing quantum of coal supply to NRS Consumers:
*Daily coal requirement by the Industries is estimated at around 5 lakh tonnes (including FSA, e-Auction and pending quantities). But supply to the Non-power Sector has been curtailed from 2.75 lakh tonnes to 2.5 lakh tonnes per day from CIL in June. *Average daily rake despatch has reduced to 10-11 rakes/day in June’22 which is less than one-fourth of same period last year. *Allocated quantity as per FSA is not being supplied to the Industries due to supply priority to the Power Sector. It is unviable for many Industries to book desired quantities through spot auctions due to huge number of participants and extremely high premium. *While supplying coal through private washeries, process, a significant quantity of coal (approximately 20%) is reduced through generation of rejects. This also leads to double handling of coal, increasing the turnaround time of transportation logistics slowing down evacuation process further. Request has been made MoC and CIL for immediately increasing the quantum of supply to the NRS consumers so that industries may at least sustain themselves.
9. Submission by NRS consumers regarding significant grade slippage from NCL mines:
NRS consumers procuring coal from NCL have raised concern regarding poor quality of coal received at the plant-ends. For an instance, NRS consumers procuring from Kakari mines of NCL via road mode are witnessing huge difference between billed grades and received grade of coal. Request has been made to CIL and NCL for taking necessary steps to eradicate grade slippage and ensure supply of declared grade of coal.
10. Submission by NRS consumers regarding non-movement of coal from private railway siding under RcR mode:
NRS consumers have 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). In spite of permission for coal movement under Priority-D from the Railways under premium freight mode, no rakes could be allotted to them as rake movements have been prioritized for Power Sector. As a result, the indents allotted to the Industry got cancelled twice under Priority-D and the whole quantity of coal is still lying at the aforementioned railway good shed siding. Request has been made to MoC and Railway Board for a special provision to be devised to initiate the movement of coal stuck at the railway siding to the respective plant-ends at the earliest possible.
