Public RelationsCIL to reduce floor price on forward e-auction
State owned Coal India Limited (CIL) has finally decided to reduce the floor price of coal offered for sale on the forward e-auction platform.
- CIL team to visit Mozambique soon - Selling 10% coal through e-auction checks malpractices - CIL price hike likely to push power rates up - CIL"s coal price hike may burden thermal power stations - Consumers peeved at inferior coal quality - CIL may reduce floor price of e-auction coal
CIL"s decision stems from a lackadaisical response to forward e-auction which started in two of its subsidiaries- Western Coalfields Limited (WCL) and Eastern Coalfields Limited (ECL) in August 2009.
The high floor price of e-auction coal was a deterrent for the consumers who were to buy coal through this route.
The board of directors of CIL will meet in January 2010 to decide the quantum of reduction in floor price of forward e-auction coal, a senior CIL official told Business Standard. The floor price of coal sold through the forward e-auction route was fixed at twice the notified price.
Two rounds of bidding have been completed so far for the forward e-auction launched in August 2009.
In the first round, WCL had offered about five lakh tonnes of coal through the forward e-auction route out of which sale of only 1,200 tonnes of coal materialized. On the other hand, the coal offered by ECL in the second round drew a blank from the consumers.
Earlier, coal consumers across the country had objected to CIL"s decision to fix the floor price of coal to be sold on the forward e-auction platform at two times higher than the notified price.
The coal consumers alleged that CIL is keen on making greater profit through sale of forward e-auction coal without caring for the interests of the consumers.
On its part, CIL had clarified that high grade coal containing low ash content from the UG mines was to be sold on the forward e-auction platform. The floor price of this coal has to be higher as the cost of coal production from UG mines was higher than that of open cast projects.
Ten per cent of the spot e-auction coal was to be sold through the forward e-auction route.
In 2009-10, 45 million tonnes of coal was to be sold through the e-auction mode and 10 per cent of this e-auction coal was proposed to be sold through forward e-auction. The two platforms for forward e-auction are mjunction.com and MSTC Limited.