CIL subsidiaries issue LoIs to 10 companies for supplies

Coal India subsidiaries have finally issued electronic letters of intent for supplies of 27 million tonnes of coal annually for 25 years to 10 companies that won them through an e-auction on discounts offered over their existing tariffs.
It is expected to soon fire up 9,000 MW of thermal capacity that has been languishing due to want of coal while consumers can save close to Rs 126 crore every year.

The auction was held for the first time in September and successful bidders will now have to seek clearance from their respective electricity regulatory commissions on the discounts they offered at the auctions on the basis of which they won allocations.

Once it is cleared by the regulators, Coal India subsidiaries will sign fuel supply agreements with these companies and supplies will start. While the letters were originally meant to be sent 15 days after the auctions were concluded in September, they was finally issued on Thursday after the modalities of the auction and the coal allocation were cleared at a board meeting on Tuesday held specifically for the purpose.

At the behest of the coal ministry, Coal India organised a board meeting on December 4 to clear the issue but board members insisted on having the allocations vetted by the Administrative Staff College of India in Hyderabad. The institution cleared last week following which a board meeting was scheduled on December 19 where it was finally cleared.