The Hindu Business Line : CIL to go for e-auction route

COAL India Ltd (CIL) has finalised a new marketing strategy to sell coal to non-core sector consumers through the e-auction route. The objective of the strategy is to bring about more transparency in marketing of coal to non-core consumers who, in fact, can get coal of their choice regarding grade of coal by paying market determined price and that too from a particular source/siding.

Under the new system, buyers can get access to bidding process which is more transparent. Sale of coal would be on market-determined price, thereby reducing the chances of black marketing. Registration for e-auction would be permitted online for all. Any bidder located in any part of the country would be free to bid for coal from any mine/siding from where it is being offered for sale without any reference to linkage.

All bidders will have to register with service provider by paying a token sum to the service provider to have an access to bidding. There should be an expression of intention from the prospective bidders as to the quantity he intends to bid. Lot size, in case of rail, is one rake and in case of road, it will be 50/100/500/1000 tonnes as the case may be. Small consumers can combine to form rake loads.

Coal companies will fix up a floor price for each lot which will not be less than the declared/notified price. Bidders will not be allowed to bid below the floor price. Successful bidders will be informed about quantity and value of coal through e-mail. Security deposits will be returned to the unsuccessful bidders. The coal company will deliver coal within three months from the date of auction, provided successful bidders deposit full value or execute bank guarantee for rail/ demand draft for road within three days.

Announcing the new marketing strategy, the CIL Chairman, Mr Shashi Kumar, said here on Saturday that the sale of coal to non-core consumers through e-auction was recently initiated by Bharat Coking Coal Ltd (BCCL) on a trial basis of 1.4 lakh tonnes of coal to its rail-linked consumers. Encouraged by the successful trial, CIL now intends to extend it to its other subsidiaries to cover all non-core consumers and even traders (non-consumers) in the next phase. Mr Kumar said that about 7 per cent of CIL's production would be sold now through the e-auction route. In the long run, CIL has plans to sell its entire production through e-auction, even to core sector consumers such power, steel plants, cement, fertilisers and so on.

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