Coal India to give tentative timelines for auction of coal linkages

New Delhi: State-owned Coal India Ltd has been asked to auction annual coal quantities it sells to users like power plants, through a transparent process.

CIL will provide quantities to be offered in the so-called linkages, which are provided to bulk users, along with timelines of the auction, according to the minutes of a meeting held in coal ministry on the issue.

 Coal India to give tentative timelines for auction of coal linkages

Coal norms. Getty Images

The decision comes on the heels of the government's auctioning 33 coal blocks in two phases.

"It was decided that CIL shall provide indicative quantity to be auctioned along with the grade and type of coal and tentative auction timeline," said the minutes of meeting of inter-ministerial committee set up for proposed auction of coal linkages through competitive bidding.

It was also decided during the meeting held recently that SBI Capital Markets Ltd (SBICAP) would hold meetings with different ministries, including power, and relevant industry bodies to discuss the approach on proposed auction of coal linkages.

During the meeting it was discussed that reserve price for auction may be set on the basis of notified price of CIL. The bidder would be informed of the grade, quantity and location of the coal being auctioned, the minutes of the meeting said.

The auction calendar for two-three years would be required to be given by CIL on a rolling basis, it said.

Since different industries have different economics, it added, sector-wise quantity to be allocated through linkage should be earmarked within the coalfields.

It was discussed during the meeting that reasonable quantity of coal should be put up for auction as very small quantity may lead to aggressive bidding by larger players and may be unviable for the industry.

For power sector, guiding principle shall be tariff minimisation at DISCOM level, the minutes said.

It was discussed that first priority may be given to plants in operation or near operation which have capacity tied through Case I bids and are without linkage or captive coal block.

However, on further deliberation, it was suggested that suitable framework may be considered for capacity already tied through Case I bids.

Till date, a total of 33 coal blocks have been auctioned in two tranches. While in the first lot, 19 coal mines were auctioned, in the second as many as 14 coal blocks went under the hammer.


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Updated Date: Mar 19, 2015 21:13:39 IST