Companies supplying cheaper power may get priority in CIL coal allotment

Supply cheap power and the government will allot coal. This seems to be the philosophy at the coal ministry. The ministry is proposing to replace the practice of offering coal to power companies through nominations with a reverse auction system, in which the company offering the lowest price for the power produced by it has the highest chance of getting coal from staterun miner Coal India.

“The coal ministry wants to make sure that Coal India’s coal, which is at large discounts to international prices, be supplied to power companies that can pass on the benefit of low input costs to consumers. The idea is to eventually replace all existing and new coal supply contracts through a power tariff-based e-auction model under which the lowest cost power producer will get supplies from Coal India,” said a senior coal ministry official.

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