CIL floats 2 tenders for 6 MT imports for medium-term supplies

Coal India ( CIL) on Friday floated two more tenders of 3 million tonne each for import of the commodity for “medium-term supplies” to the power plants.

Unlike the first tender of 2.4MT issued on Thursday, the new tenders are not indent-based but are meant for selecting a vendor undertaking to supply as and when the state gencos and independent power producers indent. This, of course, involves a certain amount of risk for the PSU miner.

The tenure for placement of order is for a period of one year beginning July this year till June 2023 and the minimum indent quantity would be 50,000 tonne. Each bid is for 5,000 GAR (gross as received) but the medium-term tenders have kept an option of increasing the bid quantityby100%to12MTs, a CIL executive said. The earlier tender kept an option of increasing the bid quantity by 30%.

The estimated value of work for each tender has been pegged at Rs 3,850 crore, which translates into a total value of around `10,000 crore, including the first tender floated on June 8 for short- term supplies to the power plants for blending.

This, however, removes the concerns of low volume handling, which could have made the first import initiative economically unviable. But for a company that has not been much into imports and have no experience of handling third-party logistics, it is still a challenge.

However, following the government orders, CIL has taken back-to-back decisions of floating tenders to import coal feeling an urgency to build up stock at the plant heads.

CIL has been increasing its output with stiffer targets and supplies to the power plants have increased 16.7% at 102.8 MTs for April-May 2022 period against 87.6 MTs during the same period in the earlier fiscal. But even with increased supplies, CIL has not been able to build up a normative stock of 25 days at most of the country’s 173 powerplants.

However, CIL plans door step delivery of the imported coal. As and when a state genco or an IPP indents, orders would be placed to ship the coal into the country.

From the date of placing the indents, delivery of coal would be made within 30 days at the free on rail destination of the power plants seeking coal, a CIL executive said, adding that for the 6 MTs coal sought through competitive bids, nine destination ports have been identified for the discharge of coal, 3 MTs each at the eastern and western coastal ports of the country. The last date for submission and opening and the bids received is July 5.