New Delhi: The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi has approved the offering of coal by coal companies through a common e-auction window instead of sector specific auctions. This e-auction will cater to all the sectors, namely, power sector and non regulated sector (NRS) including traders and coal would be offered through this auction in place of the present system of sector specific auctions.
The above will be subject to CIL/SCCL meeting the coal linkage requirements against existing linkages and do not impact the current linkages to power and non-power consumers at contracted prices, said the government in a statement. Coal offered through the single e-auction window shall be transport mode agnostic with default option being through rail mode. However, coal may be lifted by the consumers through the road mode/other modes depending upon their choice and suitability without paying any additional charges or discount to the coal companies.
Long term allotment of coal by CIL/SCCL, without affecting the supplies against existing coal linkages, to their own gasification plants shall be allowed at prices as may be decided by the coal company. However, the taxes, duties, royalty etc shall be paid by the coal companies on the notified prices of coal for the power sector.
About the major impact, including employment generation potential, the government said that market distortions would be removed and single rate for all the consumers will evolve in the e-auction market. It shall increase operational efficiencies and lead to an increase in domestic coal demand by efficiency in the domestic coal market. Besides, the discretion presently vested in coal companies of allocating coal to different end use sectors will be eliminated. Further the coal companies shall be able to establish coal gasification plants by availing coal from their own mines. It shall help in developing clean coal technology in the country.
Removal of market distortions through the offer of coal under a single e-auction window at the same rate for all the consumers of the economy will attract more consumers towards domestic coal. Thus, the demand for domestic coal is expected to increase. CIL also has ambitious coal production plans for the future with an aim of producing 1 BT (Billion Tonne) coal by 2023-24. Hence, with better availability of domestic coal with better price stability and predictability, the import of coal is expected to come down drastically. This would reduce the dependence on imported coal and would help to make Atma Nirbhar Bharat. /BI/
