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CIL turns down power producers' request to extend timelines of coal auction for supply contracts

APP had requested CIL to extend the timelines for the auction

Coal India, Power producers, Coal auction, Fuel supply contracts, Association of Power Producers, SHAKTI B (ii) scheme, Power Purchase Agreements, Coal supply contracts, PFC Consulting

State-owned Coal India has turned down the request of power producers to extend the timelines for the third round of auction and the demand for reassessment of eligibility criteria for participation in the bidding for fuel supply contracts. Also, the PSU miner said that its role is limited to making available the source-wise availability of coal.

The Association of Power Producers (APP) had requested Coal India (CIL) to extend the timelines for the auction as well as reassess the eligibility for participation in the third round of auction under the SHAKTI B (ii) scheme.

The third auction "is being undertaken by PFCCL (PFC Consulting) as per the IMC (Inter-Ministerial Committee) decision. The CIL's role is limited to making available the source-wise availability of coal which it has already provided to PFCCL. Therefore, other issues need to be taken up with PFCCL, being the agency responsible for conducting the auction," CIL told APP.

"Again it is pertinent to mention that the assessment of coal requirement has been made by the CEA (Central Electricity Authority) under the instance of PFCCL as per mechanism of the auction. As such CIL has no role in addressing the concerns raised by APP which may be taken up with the concerned agency," the PSU said.

Shakti B(ii) scheme is for power producers who have power purchase agreements with discoms but do not have coal supply contracts with CIL.

Recently, APP had brought to the notice of CIL that the participation of bidders in the SHAKTI B(ii) round 3 auction may be restricted due to stress factors arising from revenue inflows from distribution companies drying up entirely and many discoms serving notices to the power producers to back down their generation.

"Further, for the round three auction, it is noted that the maximum allocable quantity derived basis of the eligible capacity and coal quantum is not in line with the generation parameters as considered in prior rounds of auction (i.e. as per the provisions of scheme document)," APP said.

Both the above factors may result in loss of opportunity to bidders if the SHAKTI B(ii) round three auction is held as per schedule.

"Therefore, in view of the above, in order to avoid any litigations issues arising out of loss of opportunity to bidders it would be prudent to re-assess the eligibility for participation in SHAKTI B (ii) third round auction and till finalisation of same, the auction timelines may be extended," APP said.

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June 2020
10 Jun 2020