Friday, June 24, 2022

CIL floats largest-ever tenders for coal imports to prevent supply crunch during Monsoon

In an urgency to shore up coal stocks at the indigenous coal-based power plants, CIL has floated two international tenders for coal imports totalling 6 MT on Friday

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  • These two medium-term tenders for a total of 6 MT coal quantity have an option of increasing the bid quantity by 100 percent to 12 MT
  • From the date of placing the indents, delivery of coal would be made within 30 days at the doorstep of power plants

New Delhi: In an urgency to shore up coal stocks at the indigenous coal-based power plants, as directed by the government, Coal India Limited (CIL) has floated two international competitive bidding e-tenders for coal imports totalling 6 Millions Tonnes (MT) on Friday, to source coal from abroad. The bids are for 5,000 GAR (gross as received) quality of thermal grade coal. These two medium-term tenders for a total of 6 MT coal quantity have an option of increasing the bid quantity by 100 percent to 12 MT.

The tenders are not indent-based but to keep coal on tap for immediate availability and use in the future. It is an advance action by CIL in fortifying future supplies and keeping a vendor ready, said the coal miner in a statement.

Orders to be shipped within 30 days

The tenure for the placement of the order is for a period of one year beginning July of the ongoing fiscal year till June 2023. The minimum indent quantity will be 50,000 tonnes. As and when indented by state gencos and Independent Power Plants (IPPs), orders will 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 which seek coal. This means delivery at the doorstep.

The timing is significant because coal production in the country sees a decline during the monsoon months which starts in July and continues till September-October. India is seeing an unprecedented surge in power demand, which is preventing coal stocks from getting built up at power plants. Ideally, power plants are expected to shore up their coal stocks ahead of the monsoon season as both coal production and transportation gets affected. The coal imports order placed by CIL is a preventive measure to keep the power crisis in the country from worsening during the months ahead.

CIL readies coal imports

“For the 6 MT coal sought through competitive bids, nine destination ports have been identified for the discharge of coal. 3 MT each at the eastern and western coasts of the country,” said Coal India. The estimated value of the work is pegged at Rs 3,850 crore for each tranche of 3MT.

“Though CIL is on its full steam in scaling up the production to meet the domestic demand of the country, this is a step towards a state of readiness to combat futuristic coal supply crunch, if any,” said the statement.

This comes close on the heels of a short term e-tender of similar nature that the state owned coal mining behemoth issued on June 8. However, that was for a limited period and limited quantity.

The last date for submission and opening and the bids received is July 5.

With little or no experience in coal imports, CIL has floated two back-to-back international competitive bids, as assigned by the government, in a record time adhering to the timeline set.

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