Long-term coal allocation auction: CIL starts supply

After a long delay of nearly six months, Coal India has started supplying coal to some of the 10 power plants that won long-term coal allocation at the first such auction held in September last year. Coal India would supply 27 million tonnes of coal annually to these companies.

“Respective CIL subsidiaries are in the process of signing fuel purchase agreements with all the successful bidders and we would be in a position to supply their allotted quantities to all bidders very soon,” Coal India chairman Gopal Singh said. “Supplies to some of the companies have already started.”

A senior power sector executive from one of the power companies said: “We received a letter of allotment in December and approached the Electricity Regulatory Commission in January for change in tariffs.

“ERC’s approval came within a fortnight, following which we approached Coal India again for signing the fuel-supply agreement. It has been signed recently and we hope deliveries to start soon,” he said.

The auction, christened Shakti (Scheme for Harnessing and Allocating Koyla Transparently in India), was for companies that had signed power purchase agreements with discoms, but did not have any long-term coal supply agreement with the state monopoly and bidding was on the basis of discount on existing tariffs.

Following the auction, two Adani Power companies managed to secure a shade over one-third of the total coal auctioned by Coal India by offering discounts ranging between 1paise per unit and 3 paise per unit over their existing tariffs.

According to a senior Coal India executive, supplies to Adani has just commenced. Adani Power Maharashtra and Adani Power Rajasthan together secured supplies of 9.9 million tonnes of coal. It is to be supplied from South Eastern Coalfields’ Korba, Mand Raigarh, Korea Rewa mines, Mahanadi Coalfields’ Ib Valley, Basundhara and Talcher mines as well as from Western Coalfields and Northern Coalfields.

KSK Mahanadi Power managed to bag the second-largest volume of coal at 6.8 million tonnes from four mine sources. It offered a discount of 4 paise per unit for 4.5 million tonnes of G12 grade that would be sourced from SECL’s Korba and Mand Raigarh mines.

The third-largest allocation was made to Lalitpur Power Generation, which managed to secure 5.6 mt of coal from SECL (Korea Rewa), NCL, Central Coalfields, MCL (Talcher, Ib Valley and Basundhara mines) and ECL by offering discounts of 4 paise per unit, 3 paise per unit and 1 paise per unit for grades of coal that ranged between G4 and G13.

Others like GMR Kamlanga Energy secured 1.5 million tonnes of coal while GVK Power bagged 1.7 million tonnes.

ACB India managed to secure 200,000 tonnes of coal a year, Inland Power got 67,400 tonnes of coal while Sai Lilagar Power Generation bagged supplies of 376,200 tonnes of coal.

Source: THE ECONOMIC TIMES