CONSUMERS’ PAGE

1. Submission requesting amendment of overloading clause (s) in the FSA:

As per The relevant clause provisioning the overloading charges in the FSA, all penal charges related to overloading of rakes have to be paid by the consumers for at least three months before the seller/coal company requires to take any remedial measures (after complaints of overloading for 3 consecutive months).

Further on a special instance, The Bilaspur Division of SECR imposed 6 (Six) times penal detention charges i.eRs. 53,100/- per hour with effect from 25.12.2022 for load adjustment of rakes instead of standard demurrage charges (Rs. 8,850/- per hour).

The loading of rakes is the responsibility of the coal companies and the consumers do not have any role in the rake-loading process. Therefore, the penalty towards overloading should ideally be borne by the seller and excess freight charges may be borne by the purchasers.

Request has been made to MoC and CIL so that practice of levying penal charges for overloading from the coal consumers may be taken up with the railways for reconsideration

2. Submission requesting amendment of underloading clause (s) in the FSA:

In case of despatch of idle freights for underloading of rakes below stenciled carrying capacity, charges are borne by the coal company. However, the full amount is not refunded to the consumers in most of the coal bills in case of under-loading.

Refund given against underloading is often much lower than the actual underloading charges as the coal companies pay underloading charges limited to the difference of CC/stencil capacity and actual weight of coal loaded in the wagon. But the railways charge freight as per Permissible Carrying Capacity (PCC) /chargeable weight. In most cases, PCC / chargeable weight is more than the CC /stencil capacity. Also, there is no uniformity across subsidiaries with regard to considering carrying capacity based on actual tare weight in the calculation of underloading.

Request has been made to MoC and CIL so that underloading charges in totality may be borne by the seller and the existing underloading clause may be considered for modification accordingly. CIL is also requested to intervene for timely release of underloading-refund by the coal companies.

3. Submission regarding high deviation between third-party and referee results of coal supplied to Power Sector by ECL:

Power Sector consumers have been suffering due to significantly high variance between the referee Analysis results and third-party analysis results of the coal samples taken from ECL’s Salanpur area (SLS1) followed by Mugma, SonepurBazari, Bankola, Pandaveswar, Kajora etc. during FY 2020-21. The referee analysis results of most of the samples challenged by the coal company show the coal grade to be 1-4 grades higher than the third-party analysis results of the same samples.

In many instances, the referee results are abysmally higher than the analysis results by the third-party sampling agency. However, as per BIS standard, precision for repeat ability of the analysis of the same samples in two different labs should not be more than 65 kcal/ kg. Therefore, such high instances of variation between the referee and third-party results is creating uncertainty over determining the actual grade of coal delivered to the Utilities.

Submissions have been made to the Hon’ble Ministry of Coal, CCO and third party agency CSIR-CIMFR to intervene and take up the matter with ECL in order to resolve the issue of such high-grade variation between the referee analysis results and the reported results of the thirdparty sampling agency.

4. Submission by Power Sector consumers to issue proforma invoice on daily coal despatch/lifting via Road mode under Usance LC mode of payment:

As per the point A-5 of Methodology extending Usance LC for the coal supplies under the FSAs issued by SECL / CIL it is mentioned that, ‘the pro-forma invoice shall be raised on rake to rake basis in case of rail despatches and on daily basis in case of despatch by other modes. However, SECL has started taking bulk payment from its customers under the LC mechanism before issuing (in case of other than Railways) sale orders to initiate the actual supply of coal from February ’23 onwards.

Request has been made to SECL to issue proforma invoice/payment invoice on daily despatch/lifting via Road mode as in the Usance LC SOP for extending LC mode of payment facility to the Power Sector consumers.

5. Submission by Power Sector for grade determination of unsampled coal quantity as per FSA and coal value reconciliation:

According to the terms of the tripartite agreement, third-party sampling needs to be done for any quantity of coal supplied to the Power Sector. However, a significant amount of coal supplied from SECL to the Power Sector has been delivered without conducting third-party sampling during FY 2022-23. Even joint sampling was not conducted for the delivered quantity in case the third-party sampling is not done as per the FSA provision.

As a result, many Utilities received a considerable amount of unsampled coal for which reconciliation against grade slippage could not be done. As per the FSA, if coal samples are not collected from a source/despatch point the weighted average of the most recent results available in any preceding month against respective source and coal grade shall be adopted for such dispatches.

Request has been made to SECL and CIL so that grade determination of the unsampled quantity supplied by SECL may be finalised as per FSA provision, based on which Coal value reconciliation may be carried out for the delivered quantity and credit/debit notes may be issued accordingly.

6. Submission by Power Sector consumers requesting refund of differential GST amounts along with reimbursement for idle freight:

A number of CIL Subsidiaries – MCL, SECL & WCL are not providing refund of differential GST amounts while providing reimbursement for idle freights while some of the other subsidiaries such as ECL and CCL are providing underloading-refund along with GST components. Therefore, the consumers procuring coal from the Subsidiaries which are not refunding the GST amounts are being affected financially despite no fault from their side.

Request has been made to CIL for providing refund of differential GST amounts from all the subsidiary coal companies uniformly while providing reimbursement on account of underloading of rakes.

7. Submission to expedite NRS Linkage Auction under Tranche – VI for Captive Power Plants (CPPs) by Coal India Ltd:

Even as supply to the NRS consumers including Captive Power Plants (CPPs) has increased in the past few months, coal despatch is still insufficient compared to their requirement. This has led the consumers from this Sub-sector to purchase coal from the open market by paying a hefty premium and import coal from different sources, putting huge financial burden especially on the Captive Power Plants.

Request has been made to MoC and CIL to conduct the Tranche- VI NRS Linkage Auction for CPP Sub-sector at the earliest possible.

8. Request for increasing supply of rakes to the Non-regulated Sector (NRS) including Captive Power Plants (CPPs):

Approximately 15-16 rakes are being despatched by CIL to the Non-power Sector despite high coal demand, while the average daily despatch was more than 25 rakes during the same period last year. Among the CIL Subsidiaries, MCL and ECL are contributing largely to the daily coal rake despatch to the Industries till March ’23 while coal received by NRS consumers from subsidiaries like NCL, CCL, WCL, and SECL via rail mode still remains inadequate and requires significant improvement.

Also as per these Industries, change in mode of supply from Rail to Road is also not helping as supplied quantity has often been below the trigger level (65% of ACQ). Meanwhile, a large amount of their fund deposited as coal value advance is being stuck with the coal company.

Owing to an insufficient supply of coal rakes, several industries including continuous process plants are compelled to convert from rail mode to road offtake to sustain their operations.Request has been made to MoC and CIL to increase in the supply of rakes to NRS consumers including their captive power units from all the CIL subsidiaries at the earliest.