CIL floats maiden tender to import 2.416 MT coal for power sector

State-owned CIL on June 9 said that it has floated its maiden tender to import 2.416 million tonnes of coal to ensure adequate supply of the fuel to power plants in the country.

The development assumes significance in the wake of the government making all efforts to build up stock of coal to avoid the reoccurrence of power outages which happened in April on account of shortage of the fossil fuel.

“In a first ever, Coal India Limited [CIL] on Wednesday floated an international competitive bidding e-tender, seeking bids for import of 2.416 million tonnes [MTs] of coal,” the company said in a statement.

The coal being sourced on behalf of the State generating companies (gencos) and independent power plants (IPPs) is based on the indents received from them.

It is for July-September period of the current fiscal year, the statement said.

Though coal import is an uncharted terrain for CIL, within a week of receiving indents from the seven State gencos and 19 IPPs, for a total of 2.41.6 MTs of coal, the company on a war footing has finalised and floated the tender.

The current short-term tender for import of dry fuel for the second quarter of the ongoing financial year is source agnostic. This means the coal can be sourced from any country.

The Centre had nominated the maharatna firm as a centralised agency to increase coal supplies to State gencos and IPPs through import of dry-fuel at a time when the demand for coal is high.

The company’s board had last week given its go-ahead for the public sector unit to proceed ahead with the issuance of two international tenders — a short-term and a medium-term — for sourcing coal from overseas.

The last date for the receipt of bids is June 29. There is an option of pre-bid meeting on June 14 to seek clarification on any nuances of the tender, CIL said.

After the price discovery, CIL will immediately execute a contract with the successful bidder for supply of coal. Then the State-owned coal miner will enter into a back-to-back pact with State gencos and IPPs to whom coal has to be supplied.

The coal imported will be routed through nine ports located in east and west coasts of the country.

The successful agency, selected through the bidding process, will deliver coal at the doorstep of the power plants of State gencos and IPPs.

The government had earlier directed CIL to be prepared to import 12 million tonnes of coal for power utilities for the next 13 months.

On May 18, the Ministry of power had warned that if orders for coal imports are not placed by May 31 and the imported fuel does not start arriving at power plants by June 15, the defaulter gencos will have to increase their imports to the extent of 15%.

Further, if blending with domestic coal is not started by June 15 then the domestic allocation of the concerned defaulter’s thermal power plants will be further reduced by five%, the Ministry had said in a letter to State governments and power generation companies, including IPPs.

In April, coal secretary A.K. Jain had attributed the low coal stocks at power plants to several factors such as heightened power demand due to the boom in the economy post-COVID-19, early onset of summer, rise in the price of gas and imported coal, and sharp fall in electricity generation by coastal thermal power plants.

In April, several parts of the country witnessed power outages on account of coal shortage. He had said a lot of measures are already underway to enhance the total power supply in the country.

Gas-based power generation, which has fallen drastically in the country, has aggravated the crisis, he had said.

Coal India, which accounts for more than 80% of domestic coal output, is one of the major suppliers of the fossil fuel to the power sector.