CIL extends deadline for EoI submission for rationalisation of coal linkages

Amid nationwide coronavirus lockdown, state-owned Coal India has extended the deadline for submission of expression of interest (EoI) from power generation companies (gencos) for rationalising coal linkages.

The linkage rationalisation refers to transfer of coal supply source of a power plant from a far-end mine to the nearer one.

"Due to the extension of the period of COVID-19 linked lockdown, and on receipt of the request of the power plants experiencing difficulties in collection of the data/details related to the rationalisation of linkages, the last date of submission of the EoI...is extended from April 23 to May 10," Coal India Ltd (CIL) said in a letter to power gencos.

Earlier, CIL had invited expression of interest from the desired state/central gencos proposing for rationalising their existing linkages.

"Based on the information provided by the coal companies regarding the availability of coal and information from power gencos through EoI, feasibility of rationalisation of linkages shall be examined and a proposed matrix in this regard would be placed in the public domain for seven days to seek comments from the stakeholders which will be then finalised after due approval," the PSU had said.

Earlier, the coal ministry had written to CIL stating that as per the methodology, linkage rationalisation for two independent power producers (IPPs) have been done by the PSU for a quantity of two million tonnes.

It had asked the PSU to commence the next round of linkage rationalisation and apprise the Centre about the final result of the linkage rationalisation by June 30.

Under coal linkage rationalisation, the fuel linkage of a thermal power plant of an independent power producer is transferred from one coal company to another based on the fuel availability and future coal production plan of the coal company.

The underlying objective behind the exercise is to reduce the landed cost of coal due to reduction in transportation cost and cost of coal.

The reduced landed price of coal leads to savings, which has to be reflected in the cost of power generated. These savings has to be passed on to the buyers of power through a transparent and objective mechanism.

This exercise is voluntary on the part of thermal power plants.

The exercise aims to reduce the distance by which the coal is transported, thus, easing up the railway infrastructure for gainful utilisation of other sectors.

The linkage rationalisation is considered only for IPPs having linkages through allotment route.

The IPPs which have obtained linkages through auction process are not eligible for rationalisation under this scheme.

Swapping of linkages with coal sourced through auction or imports is also not permissible under this exercise.

Coal India which accounts for over 80 per cent of the domestic coal producer is a major supplier of dry fuel to the power sector.