Consumers' Page

Present Coal Scenario:

Following the pandemic related disruptions, state owned Coal India has produced 40.51 million tonnes of coal in September 2020 compared to 30.78 million tonnes produced in the same month last year, registering a growth of 31.6% on a y-o-y basis. For the period of April-September 2020, CIL has produced a total of 236.05 MT of coal, close to2% lower than the production figures of 240.93 MT during the same period of the previous financial year. Coal offtake in September also grew significantly to 46.46 million tonnes registering an upsurge of 31.7% compared to 35.28 MT during September 2019. Offtake for the period of April - September 2020 stands at 254.93 MT. The overall offtake for the ongoing financial year is 7.6% lower than the offtake quantity of 275.93 MT during the same period of the previous financial year.

Issues faced by both Power and Non-power sectors:

1. Submission from both Power and NRS consumers to keep reserve price same as notified price in the coming auctions:

Coal demand had shrunk significantly across coal consuming sectors including both Power and Non-power during the pandemic and subsequent lockdown. Keeping the customers’ constraints in view, CIL has allowed various Eauction schemes like Spot, Special Forward and Exclusive for both Regulated and Non-regulated sectors to be conducted at reserve price which is equal to their respective notified prices till September 2020. As the financial impact of the pandemic is far more long lasting, request has been made by both Power and NRS consumers to extend the facility of conducting all upcoming auctions at

respective notified prices till the end of current Financial Year i.e. March 2021.

2. Submission by both Power and NRS consumers regarding change of mode from Road to Rail for entire FY 2020-21:

Following the pandemic situation, CIL has allowed the temporary dispensation for change of coal transport mode from Road to Rail under Special Forward e-Auction and NRS Linkage Auction Route from April- September 2020. However, due to the ongoing surge of COVID cases, coal consumers are facing an acute shortage of workforce at the unloading end as well as lack of road transport vehicles. MoC and CIL has been requested so that considering the ongoing adversities, change of mode from Road to Rail for Special Forward e-Auction and Linkage Auction consumers should be allowed for the entire financial year (FY 20-21).

3. Submission regarding invoking of general Force Majeure for a period of 6 months for both Power and NRS consumers:

Considering the adverse situation following the COVID-19 outbreak, CIL has in September, 2020 directed its Subsidiary coal companies to evoke Force Majeure for the month of April and May 2020 and accorded its approval for giving relief to the affected customers to the extent of prorated Monthly ScheduledQuantity (MSQ) of the said months.

However, as per the Office Memorandums issued by the Government, Force Majeure should be invoked for a period of minimum three months to six months.

As per the provisions given in the government directive, CIL is requested to invoke the general Force Majeure for the affected coal consumers across the board for a period of six months starting from 25th March, 2020.

Issues faced exclusively by Power sector consumers:

4. Concerns over recurrent grade variation from various sidings of ECL:

The issue of grade variation has consistently occurred in Bankola, Ukhra, POCP Railway sidings, Salanpur and Sonepor Bazari area of ECL in recent months where variation of three to five grades have been observed in the coal received by the Utilities. This grade slippage has caused the TPPs to incur major financial loss due to less quantity realization against annual contracted quantity as per FSA and higher specific coal consumption and reduction in plant PLF. It had been repeatedly urged through representations and deliberations with the coal company along with MoC and CIL for immediate re-assessment of declared grades from the mines where issues with coal quality are frequent.

5. Issue of grade slippage from Talcher sidings of MCL:

Power sector consumers procuring coal from MCL are facing significant operational difficulties due to repeated instances of grade variation in coal procured from MCL’s Talcher SPUR- I, II, IV, VI, VII, VIII sidings during June-August 2020 period. Variations in the tune of one to three grades are consistently occurring in the rakes loaded from these sidings. Request has been madeto the concerned coal company along with CIL and MoC by the Power sector to take up necessary measures in order to ensure supply of declared grade of coal as consistent grade slippage hampers the generation and increases the per unit energy cost.

Issues faced exclusively by NRS consumers:

6. Request for providing of Force Majeure relief for the customers of MCL:

NRS consumers procuring coal from MCL have not been receiving rakes which were pending since FY 2019-20 in spite of high demand at their end and were forced to procure from imported sources by paying high premium. However, they were supplied with huge number of pending rakes during the COVID-induced lockdown even as demand was significantly reduced as many of these factories were under complete and partial closure. This situation forced the Industries to cancel the rakes supplied during lockdown period which subsequently attracted hefty penalty for short-lifting and also termination of FSA. CIL has in September 2020, directed its Subsidiaries to evoke Force Majeure for the month of April and May 2020 for giving relief to the affected customers to the extent of prorated MSQ of the said months. However, it is requested to MoC and CIL that general Force Majeure may be invoked for waiver of all forms of performance related obligations during national lock down period i.e. 24th March to 31st May, 2020. Also, termination of FSAs may not be imposed for rakes being cancelled during the national lockdown.

7. Referee analysis results from ECL pending since2019:

NRS consumers procuring coal from ECL have stated that in many cases, reports of referee analysis are pending since 2019 and the consumers are not able to get any status update of the same in spite of giving several written representations to the coal company. Settlement of quality claims for samples which has not been challenged by ECL have also been kept pending in many cases. Request has been made to expedite the process of releasing the Referee results and immediately process the undisputed quality claims which have been kept on hold for long.

8. Pending quality claims for Nonpower sector consumers from ECL:

Several Industries procuring coal from ECL have large amounts of compensation pending since September 2018 in form of quality claims as the Referee analysis result of received quantity revealed that the supplied grade of coal was often significantly lower than the billed grade. ii. In some cases, third party analysis results showing grade slippage, were challenged by ECL after the stipulated timeframe, which subsequently got rejected by QCI (3rd party agency) as per the norms of tripartite agreement. However, ECL has not resolved this issueagainst any claim of those amounts so far. Submissions and deliberations are continuing for taking upthese pending claims into processing.

Issue related to Railways for all coal consuming sectors :

9. Submission to Railways regarding discrepancy in the Tare Weight of rakes being received at the sidings:

Consumers from both Power and Non-power sectors stated that during weighment of rakes at the electronic in-motion weighbridges, the actual tare weight of rakes is often found to be much higher thanthe designed tare weight in BOXNS and BOXNHL wagons which leads to short receipt of coal of equivalent quantity. Since the designed tare weight is also mentioned in the RR, the tare difference leads to significant overcharging of freight for quantity of coal not delivered to the buyers. This leads to major financial loss for the consumers.

*Request has been made to the Railway board to consider the actual tare weight of every wagon before loading them. *Periodic assessment of tare weight of different types of wagons needs to be done at loading and unloading ends in presence of customers and the standard tare weight needs to be revised accordingly. *Also, it has been requested to remove the anomaly in designed tare weight and actual tare weight and prepare the RR with correct weighment.