CIL to engage consultant on auctioning of coal linkages

State-owned Coal India Ltd will engage an external consultant to examine various structures and implementation models to auction coal linkages.

New Delhi: State-owned Coal India Ltd will engage an external consultant to examine various structures and implementation models to auction coal linkages.

The decision was taken during the recent meeting of Inter -Ministerial Committee (IMC) constituted for the proposed auction of coal linkages through competitive bidding.

"The Committee suggested that an external consultant may be appointed to suggest methodology for different sectors... It was decided that CIL be requested to engage such an external consultant at the earliest," said the minutes of the meeting.

The Terms of Reference of the consultant would be to examine various structures and implementations models for auction of coal linkages/LoAs (Letter of Assurances) or other such market-based mechanisms and to recommend the optimal structure that would meet the requirements of all the stakeholders, the document said.

The need for the IMC, it further said, was felt in view of proposed auction of coal blocks through competitive bidding and the desirability of providing a level playing field for supply of coal to different stakeholders. The auction for the coal blocks to private sector is to be held next month.

During the meeting the representatives from the Power Ministry pointed out that there is already a backlog of LoAs, which have been issued to the power sector for which fuel supply agreements (FSAs) are yet to be signed.

"These include 4,000 MW (out of 78,000 mw) capacity. In addition for 30,000 mw capacity, LoAs have already been issued. These are prior commitments which need to be fulfilled before any fresh linkages can be granted," it said.

Representative of Ministry of Steel suggested that a separate allocation of coal linkage may be made for non- regulated sectors like iron and steel, cement, CPPs etc.

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