CIL to conduct special auction for power producers this month

State-owned CIL will this month conduct special auction to offer coal to distressed power producers as the government gears up to provide round-the- clock electricity to all. "In view of availability of coal at certain places, it has been decided to further offer coal under 'Special Forward E-auction for power producers-Phase III' for the balance period of the this fiscal(February-March, 2016)," Coal India Limited (CIL) said in a notice.

CIL, which accounts for over 80 per cent of domestic coal production, will put on offer three million tonnes in the third round for those distressed power plants which have neither linkages nor power purchase agreements, a company official said.

The official further said that the PSU had already put on offer seven million tonnes of coal under the two phases of special auction held so far this fiscal. The two auctions were conducted on September 30 and October 1 last year.

"Subsequently, the scheme was modified....to launch the second phase of special E-auction for power producers which was conducted" in November, CIL said. The third phase will be held from February 16-18 ,it said. 

According to KPMG's Niladri Bhattacharjee, in the previous rounds of special e-auctions, the reserve price was quite high and as a result offtake was muted. Also, most of the quantity offered was cleared at floor price.

"Receivables from state utilities are already at a record high and fuel cost being a pass-through, it is difficult to understand from where the states will bear additional burden of e-auction premium. In the current economic scenario, a rationale reserve price for coal will help the ultimate objective of the Government in this sector," he said.