Although the coal ministry wants to increase coal availability in forward e-auction, Coal India (CIL) subsidiaries have lined up more number of spot e-auctions for the one month period up to March this year.
While five CIL subsidiaries — Bharat Coking Coal Ltd (BCCL), Central Coalfields Ltd (CCL), Mahanadi Coalfields Ltd (MCL), North Eastern Coalfields Ltd (NECL) and South Eastern Coalfields Ltd (SECL) have scheduled their spot e-auctions, only three subsidiaries namely MCL, SECL and WCL (Western Coalfields Ltd) have scheduled for forward e-auctions. But none of the auctions have declared the offered quantity keeping the option open of canceling the auction. Only Singareni Collieries Ltd has offered 1.3 million tonne for forward e-auction during the month.
Coal secretary Anil Swarup said, “We want to increase coal availability in forward e-auction and spot e-auction to that extent will be brought down.”
A CIL official said the forward e-auctions conducted through MSTC this fiscal has not been very successful. Although there are nine forward and spot e-auctions lined up before the fiscal ends, none of the CIL subsidiaries has declared the offered quantity. “Spot e-auction has been the focus of the CIL subsidiaries during the last quarter of this fiscal and more coal may go to forward e-auction from the next fiscal,” the official said, adding spot e-auctions have not been very successful this year and so forward e-auctions have also taken a hit. If the last month of this quarter doesn’t see success in spot e-auction, it would be difficult making a demand projection on which rests the success of forward e-auction.
The coal ministry’s special forward e-auction scheme for 2015 had few bidders since the floor price fixed was too high, much above the global prices then. Although eight companies participated in the bid, the auction nearly failed to get any premium above the floor price. The ministry, under a special e-auction scheme for power producers, offered 5 million tonne for sales. But MSTC could auction less than half the quantity that CIL offered.
For power plants having long-term and medium-term power purchase agreements (PPAs) the reserve price was set at 20% (of the CIL notified price) plus the CIL notified price for the power sector. For power plants having short-term PPAs or no PPAs at all, the price was set at 40% plus the CIL notified price.
“We have urged the ministry that bidding should start at the notified price for both the regulated and non-regulated sectors,” Sashi Kumar of the Coal Consumers Association of India (CCAI) and also the former CIL CMD, said.
Swarup said that the ministry has started working on structuring the e-auction but on matters of pricing the ministry would leave it to the CIL. He didn’t agree that oversupply and imports were reasons for the e-auctions to fail but said that the “so called surplus is because of the power plants operating at low PLF”. Imports, he said, have come down by 15% this year, which has saved R2,300 crore worth of foreign exchange.