Coal ministry asks CIL to review coal linkages

Coal ministry has asked Coal India Limited (CIL) to ensure that coal allocation is made from sources close to the consumer as far as possible, subject to coal availability at the source of allocation.

The ministry has advised CIL that as regards new consumers who have been issued letters of assurance or have been recommended letters of assurance but not yet entered into fuel supply agreements or where coal supply has not commenced, CIL should allocate sources in a rationalised manner so as to minimise transportation cost.

The ministry's directive comes following requests by independent power producers seeking change of source of coal supply.

Coal India Limited has informed the ministry that six independent power producers (IPPs) have requested for change of source and the decision on the pending applications are likely to be taken by the end of the current fiscal year.

Stating this in the Lok Sabha today, minister of state for coal Sriprakash Jaiswal noted that an inter-ministerial task force has been constituted to undertake a comprehensive review of existing sources and consider the feasibility for rationalisation of sources for all power utilities that are already getting coal.

The task force, constituted on 25 June 2010, is required to submit its report within three months of its constitution and the report will thereafter be examined in the ministry for taking further necessary action if required.