3 Jan 2014

Assured coal supplies to 78,000 MW projects to boost power production

 Coal sector witnessed a number of initiatives during 2013 to augment coal production and supply. Regular reviews of captive coal blocks were held by Inter-Ministrial  Group to expedite their development, fuel supply agreements were signed with Power Sector and setting of Coal regulator approved. Under the bidding policy, seventeen coal blocks allotted to the Government Companies and thirty eight coal blocks brought under production. Highlights and achievements of the Coal Ministry during the year are as follows:

Assured coal supplies to 78,000 MW projects to boost power production
            In a major boost to the power sector, the Government approved supply of coal to power plants with a capacity of 78,000 MW. Commissioned or to be commissioned during April 2009 to March 31, 2015. Coal India Limited(CIL) has already signed 157 Fuel Supply Agreements for a capacity of 71,145 MW. This will not only increase the power generation further but will also fast track several power project which are under consideration.

Coal Regulator proposed for Coal Sector
            The Government has approved the setting up a Regulatory Authority for Coal Sector on June 27, 2013. As the enactment of the legislation through the Parliament would take some time, therefore, it was decided that a non-statutory regulator be set up through an appropriate executive order. Accordingly, the matter has been referred to the Ministry of Law for advice/ consultation for framing the executive order. The Coal Regulatory Authority Bill was also introduced in the Lok Sabha on December 13, 2013 for its consideration.

Public Private Partnership to Augment coal production
            The Government has decided to initiate Public Private Participation (PPP) to augment coal production in the country. Accordingly, a committee has been set up under the chairmanship of Secretary (Coal) with representatives from Planning Commission, Ministry of Finance (DEA), Ministry of LabourMinistry of Law & Justice (DLA) among others to recommend a framework for the PPP. The committee deliberated on the various models including engaging Mine Developer cum Operators (MDO) & In consultation with all the stake holders, the Government is in the process of finalizing a Model Concession Agreement (MCA) for engagement of MDO in CIL.

Further Disinvestment of Neyveli Lignite Corporation
            Disinvestment of 3.56% paid up equity capital of Neyveli Lignite Corporation (NLC) out of Government of India’s shareholding (93.56%) has taken place through Institutional Placement Programme (IPP). This has made NLC compliant with the norms as per SEBI regulations. The 59701260 shares have been sold @ Rs. 60/- per share and total sale proceeds received by the Government are Rs.358.29Crores.
Allocation of Coal Blocks to Government Companies
            Under newly initiated bidding policy seventeen coal blocks, fourteen blocks for specified end-use i.e. Power and three blocks for Mining were allocated to various State Government Companies/Corporations/CPSUs. The proposed Coal Mines Production and Development Agreement to be signed by the Government with the respective eligible Companies is under finalization.

             Further, the Government has also decided to put on offer five lignite blocks located in the states of Gujarat and Rajasthan for Power/Commercial mining/ Underground Coal Gasification, for allocation to Government Companies and invited applications July 29, 2013 from Government Companies/Corp. particularly from the state of Gujarat and Rajasthan, keeping in view the fact that lignite cannot be transported over long distances due to its low calorific value, high moisture and soft/brittle nature of mineral, making it susceptible to catch fire. The applications received in response to the NIA are under process.

             Four coal blocks have also been identified for allocation to power projects on the basis of competitive bids for tariff and applications for the same were invited on December 20, 2013. Besides this, procedure for allocation of area containing coal through auction by competitive bidding is under process.

Thirty eight captive coal blocks come under Production
            The target fixed for coal production from the captive coal blocks for the year 2013-14 is 46.15 million tonnesAs on date (upto October, 2013), 38 captive coal blocks have come under production. The production achieved during the year 2013-14 (upto October, 2013 provisional) is 21.740 million tonnes (13.645 million tonnes for private companies and 8.095 million tonnes for government companies).

Third Party sampling of coal supplies introduced
            Various consumers of Coal India Limited have been raising their concern about the quality of coal supplied. In order to address these concerns, CIL has introduced Third Party Sampling and analysis of coal supplied to various power plants in the country. For this purpose, CIL has engaged independent third Party agencies for sampling and analysis of coal at suppliers’ end and the system has been made operational from October 1, 2013

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