Coal India eases e-auction norms; plans to change auction and allocation methodology
Kolkata: Maharatna coal giant Coal India Limited (CIL) on Friday announced that it has implemented measures to relax e-auction norms, such as reducing the earnest money requirement and increasing the quantity of coal available.
The company also plans to revise its auction and allocation methods to boost participation.
"CIL has taken steps to ease the norms in e-auctions like lowering the earnest money deposit (EMD) and ramping up the quantities offered under the auction hammer," the PSU said in a statement.
Coal India has directed all its subsidiaries, except for Northern Coalfields Ltd, to increase their e-auction offerings to 40 percent of their total production for the second and third quarters of this fiscal year.
Currently, Coal India operates a single-window e-auction system, allowing consumers to choose their preferred coal transport method.
"The company is also planning a revamp of its auction and allocation methodology under its electronic window," the statement said.
A concept note has been circulated to gather feedback from e-auction bidders.
Some proposed changes include shortening the auction window to three hours from the previous extended process, allowing consumers to switch their mode of transport from rail to road post-bidding without additional costs, and permitting a single bidder to place up to four bids per basket instead of just one.
The reduction of the earnest money deposit in e-auctions by over a third, from Rs 500 per tonne of coal to Rs 150 per tonne, aims to encourage greater participation.
This change will enable consumers to participate in more auctions with the same capital due to increased cash availability.
Although the PSU is already supplying improved quantities of coal, as evidenced by its loading rates, the company plans to meet any latent demand.
The average rake loading this fiscal year is 316.7 per day, an increase of 40 rakes per day over the same period last year.
Coal is typically supplied to consumers at notified prices, with the reserve price in e-auctions being a percentage added to the notified price.
Subsidiaries now have the flexibility to set their reserve prices based on various factors, such as local demand-supply scenarios, optimization of loading modes (especially road transport), coal stock at the mine, and previous e-auction booking levels.
The coal stock at thermal power plants is nearly 45 million tonnes, about 33 percent higher than the same period last year.
CIL aims to meet the full domestic demand and any latent demand within the system.
Coal India accounts for over 80 percent of domestic coal production.
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