Coal India Ltd (CIL) may further reduce the floor price for forward e-auction and may take into account the average premium gained in 2009-10 in e-auction for determining the floor rates. CIL earned Rs 2,709 crore extra from sale of 45.7 million tonne of coal via e-auction, which commanded an average 59.8% premium over the notified price in 2009-10.

A Roy, chief general manager, marketing, CIL, told FE while the notified price would have fetched CIL Rs 4,529 crore by selling 45.7 mt, e-auction has fetched Rs 7,238 crore. ?The average premium over the notified price has been 59.8%, indicating that e-auction has gained its stability,? Roy said.

According to officials, coal minister Sriprakash Jaiswal has recently proposed the setting up of a special task force to work out a modus operandi for forward e-auction, which started in August 2009 but did not gain momentum for high floor prices.

CIL was supposed to push around 4.5 mt or 10% of the e-auction allocation for forward e-auction in 2009-10.. But after the first round in August 2009, in which Western Coalfields offered 5 lakh tonne, only 12,00 tonne could be sold. Eastern Coalfields, which offered nearly the same quantity, drew a blank.

In fact, floor prices for forward e-auction was fixed at double the notified price, after which there was an auction price for lifting the coal. Although in March 2010, CIL reduced floor price and fixed it at 80% of the notified price, forward-e auction did not take off.

According to officials, the floor price of coal for forward e-auction should have been fixed taking into account the premium gained in e-auction. While 1.25 mt of Northern Coalfields Ltd’s coal got a premium of 105% over the notified price, 9.416 mt of South Eastern Coalfields’ coal got a premium of 97%. Eastern Coalfields Ltd, which allotted 1.162 mt, got the least premium over the regular price, ie 38%. But ECL was first selected for forward e-auction, which at the first instance claimed a 100% more floor price over the regular price, thereafter calling for an auction price.

However, CIL chairman Partha S Bhattacharyya has been insisting that high quality ECL coal with low ash content should get an import parity price and for that forward e-auction could be the only mechanism to realise such a price.

The ministry, according to officials, is currently reviewing the premium gained over the notified price in e-auction and may make the average premium price gained or 60% of the notified as floor price or base price for forward e-auction.