CIL to levy extra charges on PSUs that seek bridge linkage extension, say sources

New Delhi: In order to discourage PSUs from seeking extension in bridge linkages, India's biggest coal miner Coal India Ltd (CIL) is considering supplying coal under such contracts that have been extended at higher charges, two separate sources aware of the matter told PSU Watch on Thursday. Discussions are believed to have been initiated after the government asked CIL and Singareni Collieries Company Ltd (SCCL) to come up with higher rates for the supply of coal under extended bridge linkage, said the sources.

Bridge linkages are granted by CIL to Central and state PSUs which have been allotted coal mines for a specific end-use, like power plants. However, before these coal mines start production, bridge linkages are provided by Coal India and SCCL to bridge the gap between requirement of coal by these PSUs and the start of production from the allotted coal mine.

Bridge linkage is granted for a fixed period of three years, after which PSUs need to make requests to the Ministry of Coal for an extension.

Financial disincentives for bridge linkage extension

"Off late, what has been happening is that we are getting repeated requests from PSUs to extend bridge linkages because they have failed to operationalise the mines that they were allotted to them several years ago. And this has been a recurring problem. The idea behind limiting the duration of bridge linkages to three years was that it will act as an incentive for allottees to expedite production from their own coal mines. But that's not happening," said a government official.

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"That is why the Ministry of Coal has asked CIL and SCCL to bring in financial disincentives for bridge linkage extension so that PSUs operationalise their coal blocks faster," said the source.

'Talks on at CIL for levying financial charges for extension'

Another source aware of the development said that talks are on at CIL to impose financial charges on PSUs seeking extension in bridge linkage but did not disclose any numbers.

In addition, the Ministry of Coal has also asked the Ministry of Power to seek roadmaps from PSUs for operationalisation of coal blocks allotted to them when they raise a request for extension of bridge linkages, said the government official.

Bridge linkages are available only to specified end-use plants owned by Central and state PSUs which have been allotted coal mines. It is not extended to private sector coal mines.

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