Coal India to defend any action against e-auction, blames railways linkage for the problems

Coal India is fuming at the Planning Commission's move of curbing down the amount of coal offered for e-auctioning. In an interview to CNBC-TV18, NC Jha, Chairman of the company said that e-auctions of coal should continue. He informed that e-auction has approval of the Supreme Court.

Jha stressed that the PSU will continue its 10% e-auction unless there is a new directive. He explained that 81% premium in e-auction comes over fuel supply agreements (FSA) and it will facilitate clearance of huge inventories.

He added that any change in the e-auction policy will call for changes in the new coal distribution policy.

Earlier, the Planning Commission had said that 10% of coal, which is e-auctioned by Coal India, should be cut down. The commission feels that CIL should adopt pool pricing for thermal coal and should also plan for import of coal.

Chairman of Coal India Mr. Jha said in an interview that the e-auction system was introduced in our coal sales based on a judgment from the Supreme Court. The basic issue was those consumers who have not been getting linkages after 2001 should get some access to coal and this system of e-auction was introduced. As per the new coal distribution policy which was developed by the ministry of coal, with the opinion received from different ministries including power, it provides for 10% of the coal produced by Coal India to be offered under e-auction. So e-auction was introduced in 2006 and it is continuing.

The issue is that about 80% of the offered coal to e-auction goes by road and only 20% goes by rail. I have also come across certain news, that the power sector is demanding some coal from the e-auction. The question is, is the coal not available? We ended up last year with 70 million tonne of coal stock. The last fiscal we had offered to the power sector something around 335 million tonne of coal. But what reached them or what they could lift was only 304 million tonne. We had to add 7 million tonne of our produce to this stock.

So is it an issue that the coal is not available, so whatever is going through the e-auction to be offered to the power sector? No, it is not. I feel that the e-auction should continue because this provides for only 10% of our total produce to those needy consumers who have not been getting linkages, because providing linkages to the non-coal sector consumers was stopped since 2001. Now all those new industries which have come up after that from where should they source coal?

This is one thing which had the approval of the Supreme Court and which was factored in the new coal distribution policy and is under implementation. Now whether this will continue or not continue is not in my hands. My mandate is to provide a minimum of 10% coal through the e-auction route to the needy consumers. As long as the new directive does not come, we will continue to offer this coal to the e-auction consumers.