The Union Cabinet on Saturday approved offerings of all non-linkage via a common e-auction window instead of sector specific auctions.
The decision was taken by the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi.
Accordingly, offering of all non-linkage coal by coal companies will be made through one e-auction window of Coal India Limited (CIL) or Singareni Collieries Company (SCCL).
“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,” an official communique said.
The new model will not impact the current linkages to power and non-power consumers at contracted prices, the communique said.
“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 or other modes depending upon their choice and suitability without paying any additional charges or discount to the coal companies.”
Besides, the communique said that long term allotment of coal by CIL or 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 power sector.”
As per the communique, 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 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.”
In addition, the communique said that removal of market distortions through 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 of domestic coal is expected to increase with better availability of domestic coal with better price stability and predictability, the import of coal is expected to come sown drastically.”
“This would reduce the dependence on imported coal and would help to make Atmanirbhar Bharat.”