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Consumers' Page
1. Submission by Power Sector Consumers regarding immediate issuance of credit notes against excess surface moisture in coal:
As per the FSA signed between coal company, consumers and third party sampling agency (CIMFER), issuance of credit notes is required in case the monthly weighted average surface moisture in coal exceeds seven percent (7%) during the months from October to May and nine percent (9%) during the months from June to September. Though Coal companies issued debit /credit notes for variation in grades, it may kindly be noted that despite provisions in the FSA, credit notes on account of higher surface moisture have not been issued by SECL yet. A huge amount of credit notes in this regard are pending for the Power Sector consumers since the inception of 3rd party sampling.
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Request has been made to SECL and CIL for early issuance of credit notes to its consumers on account of excess surface moisture in coal supplied.
2. Submission by Power Sector Consumers regarding immediate issuance of credit notes against supply of ungraded coal as well as regular instances of grade slippage:
a. Following the long-standing impasse over
refund against ungraded coal, a notification has been issued by CIL on 18.07.2022 where raw coal with GCV 1500 to 2200 Kcal/kg has been divided into two slabs by identifying them as below grade coal and compensation to the consumer for supply of each slab has been described there. However, as the notice has been issued with prospective effect, therefore, it would not be applicable for supply of ungraded coal before 18th July 2022.
In case of supply of ungraded coal Prior to 18th July, the consumers were eligible to pay the cost of Coal at Re.1/- (Rupee one only) per tonne excluding the Royalty, cess, sales tax, etc. to the coal company. However, credit notes to be issued by SECL against supply of ungraded coal to its valued customers are pending for a prolonged period.
Representation has been given to SECL and CIL seeking clarification on whether the credit notes for supply of ungraded coal would be issued as per provision in the older FSA (at Rs. 1/tonne) or the CIL notice on price of below grade coal will be allowed on a retrospective effect as well.
b. Disbursement of credit notes worth crores of rupees by SECL against grade slippage in coal supplied from various mines to the Power Sector are also pending for more than a year. Request has been made to SECL for immediate issuance of pending credit notes on account of grade slippage in coal supplied to the Power Sector consumers.
3. Submission by Power Sector consumers regarding carry forward of rakes from SECL:
Utilities procuring coal from SECL could not lift the allotted quantity during January-March, 2020 as rakes allotted to them could not be loaded by SECL/SECR due to coal production issue in certain mines. As a result these rakes were carried forward for loading in the subsequent months. However, due to several restrictions during pandemic and darth of workforce at the unloading-ends, these rakes could not be re-indented by the concerned power plants.
Also, many Utilities often receive less coal than their stipulated quantity from SECL due to a significant demand-supply mismatch caused by production issue and Railway constraints which causes the backlog of carry forward rakes from SECL to the power houses continue to accumulate.
As per the SOP laid down by CIL, it is interpreted that if the carry forward rakes are not reindented within the given time-frame then it is considered as deemed delivered quantity which attracts penalty below trigger level.
Request has been made to CIL that if the Utilities are unwilling to re-indent the carry forward rakes due to non-supply by the Subsidiary Coal Companies within stipulated time, then that quantity should not be considered as deemed delivered and no penalty be imposed on them. It is also requested that dispensation of carry forward rakes, not supplied during the time of allotment due to production issues / Railway constraints, may only be implemented for willing customers.
4. Request for supply of entire ACQ of coal from SECL to the Power Sector consumers via Rail mode:
As per SECL notice regarding modalities of order booking, it is mentioned that monthly allocation based on demand of coal raised by the consumers will be done up to the trigger level (75%) via rail mode and quantity beyond trigger level and up to MSQ will be offered through Road/ RCR mode only. However, for Power plants especially at a long distance from the mines, Road / RCR mode of supply is unfeasible both on the basis of cost of transportation and logistics problem.
Consumers from Power Sector have stated that the mode of supply mentioned in the Schedule-I of FSA is Rail and it implies that FSA is primarily signed for supply of coal through Rail. Also, provision given in FSA for supply of coal other than Rail in clause no.4.3.3 under main clause 4.3 of Sources of supply clearly points out that coal companies can supply coal in other than Rail mode is only 5% of the ACQ and that is also a temporary arrangement till the time the major railway line in SECL is constructed and made operational.
Request has been made to SECL to supply the entire allotted quantity of coal (100% of ACQ) to the power Plants via Rail mode especially for plants located far from the sources of coal supply.
There has been an inordinate delay in reconciliation of excess coal value against the quantity despatched by MCL especially via Road mode despite rigorous follow-ups by the consumers from both Power and Non-power Sectors. A notable amount of credit notes against short-receipts are due to be issued for a long time, some of them are pending for more than 6-months as well. This is putting a massive financial pressure and causing procurement hurdles for the consumers.
Request has been made to MCL for timely release of pending credit notes and reconciliation of coal bills pertaining to despatch through Road mode at the earliest possible.
6. Request for effective utilisation of higher grade coal available in different CIL Subsidiaries by supplying it to Industrial Sector:
Industries in general require low ash coal as high-ash coal lowers the reactor productivity, increases the fuel consumption rate and generally has a deleterious effect on solid direct reduction process. For every one percent increase in the ash content of coal, productivity in these sectors comes down at least by 2 percent in the ash range of 20-30 percent. The qualitative requirements of coal in both cement and sponge iron sectors are specified in the Indian Standard (IS) with recommended ash range of 24-27% for efficient usage in these industries.
It is seen that G2-G7 grades of coal in India have ash content within the recommended range specified in the IS standard but in lower grades of coal, ash content is much higher. As CIL produces around 15% of G2-G7 grades out of its total production, it is requested MoC to ensure that high-grade and low-ash coal available in CIL mines be supplied to the Industries, so that such precious resources can be preserved and utilised scientifically.
7. Request to Include Producer GasPlant in FSA Categories for Coal Linkage:
Tappingcoalresourcesthrough coal gasification with the most modern research technology to provide the feedstock to theindustryisanidealsolution to be able to harness its huge coal reserves as energy sourceand feedstock for the industry in an environmentally friendly manner.
Indiaaimsfor100milliontons(MT) coal for coal gasification by 2030 with investments worth over Rs. 4 lakh crores. The Government of Indiahas also introduced a concession of 50% on revenue sharing of coal used for gasification and/or to sellcoalforagasificationprojectthroughaCoalMineallocatedunderCommercialMiningRoute.
Request has been made to MoC to provide necessary guidance so that coal linkage can
be availed under the category of Producer Gas Plant (PGP) in theupcoming auctions as it would help India achieve its coal gasification target.
8. Appeal by Industries and their CPPs for increasing supply of total coal quantity and number of rakes:
In spite of robust growth in overall coal production and despatch by CIL, supply to NRS consumers have shrunk significantly since September 2021. CIL’s actual allocation of coal to NRS is languishing at just 14% of total despatch. Supply to the NRS consumers have dipped by 28.5% in April-July 2022 period on a Y-o-Y basis. Daily average rake supply to NRS has become 1/3 of the same period last year.
Request has been made to the Hon'ble Minister of coal, MoC, MoR and CIL to immediately increase supply of coal quantity and number of rakes to NRS consumers. Also, allocation of coal may be as per ACQ instead of restricting it to trigger level. Supply to the CPPs may be increased as per ACQ so that excess power generated by the units could be transmitted to the grid.
9. Submission by NRS Consumers for refund of EMD against undelivered quantities via RcR Mode from NCL:
As per Exclusive e-Auction conducted by NCL dated 23/12/2021, allotment of G-8 Grade coal was made through Krishnashila siding via RCR mode. Successful bidders in the said auction had submitted full coal value to NCL.Meanwhile during early April 2022, Railways prioritiseddespatch of coal to Power Sector owing to soaring demand which had restricted movement of coal to the Industries via Rail as well as RcR mode.
Due to non-supply of e-Auction coal for a prolonged period, the Industries submitted applications seeking refund of coal value without forfeiture of EMD as they were not at fault in this case but EMD amount had been deducted by NCL from the refunded coal value.
Request has been made to NCL to process refund of the deducted EMD amounts against exclusive e-auction held on 23/12/2021 as the consumers are in no way responsible for the non-lifting of allotted quantity.
10. Request for enhancement of supply to NRS Sector via Road mode from Northern Coalfields Limited (NCL):
NRS consumers sourcing coal from Bina area of Northern Coalfields Limited (NCL) are not being able to lift even the trigger-level supply (75% of ACQ) from the aforementioned mine due to a number of reasons such as,
• Lesser allotment of coal than what is required for lifting-trigger level quantity within the validity period of DOs.
• Allocation of insufficient number of vehicles at the road supply loading point on a daily basis.
• Inadequate coal availability in stock yards for allowed vehicles to lift the required quantity of coal on a day.
• Daily loading time for allowed vehicles is not sufficient to complete loading of all vehicles allotted to load the daily DO quantity.
Request has been made to NCL and CIL so that the quantity of coal allotted to the Industries from Bina Project may please be increased immediately by NCL, number of vehicles allowed per day at the mine loading point may be increased to a level which is sufficient to load the daily allotted quantity and round the clock loading or loading till the time the last vehicle is loaded for the day should be allowed from the area.
