Coal India Limited (CIL) has been mulling on substituting imported coal with domestic coal for quite some time. Earlier, it had advised the coal companies to sign the MOUs by taking it with the consumers in a suitable manner. It had also recommended for monthly releases of coal to CIL, the quantity of the release to be as indicated by CEA for FY 2020-21.
Then there’s the issue of month-wise allocation of coal under Import Substitution, which is for the period of October-March’21. CIL has referred this issue to CEA. The CEA was made aware of the fact that for the remaining quantity of coal, the power plants would be instructed to execute one time MoU for the balance period of time so that there should be an unhindered supply of coal by the coal companies.
The CEA was also made aware of the fact that for any additional requirements of coal, CIL or the coal companies might consider the same as per the eligibility as well as the availability of coal.
Hence, it was confirmed that for coal allocation under import substitution for the next coming months, including the month of October’20, the quantity of coal supposed to be released would be according to the import substitution MoU. And for those power plants where MoU hasn’t been signed, it was decided that the coal would be supplied only after the MoU would be signed.
Keeping in mind the above developments, different types of allocations have been provided for different kinds of scenarios, one of them being the allocation for the power plants who have applied to CIL for the month of October’20, which also includes those plants which had applied for additional allocation. And in the other case, allocations for the remaining power plants to be till September’20 and balance quantity for the period of October-March’21.
CIL had, on its part, made it clear that all other terms of supply and all commercial matters, which also included computation of Performance Incentive (PI), would be as per the MoU. Additionally, CIL had also directed the power utilities to submit an understanding, mentioning that they would stop the coal import and would also ensure that they would lift the minimum assured level quantity (trigger level quantity) against their FSAs from the respective coal companies.
