Lok Sabha Question No. 160 (STARRED), answered on 2023-12-13
Subject: Rationalization of Coal Linkages
Ministry: COAL
Asked by: Sunil Kumar Mondal

## GOVERNMENT OF INDIA MINISTRY OF COAL

## LOK SABHA STARRED QUESTION NO. *160 TO BE ANSWERED ON 13/12/2023

## Rationalization of Coal Linkages

*160. SHRI SUNIL KUMAR MONDAL:

Will the Minister of COAL be pleased to state: (a) whether adequate steps have been taken to reduce production cost and also import of coal during the last two years and the current year; (b) whether steps have been taken by the Government for rationalization of coal linkages; (c) if so, the details thereof, State/UT-wise along with the future initiatives in this regard; and

(d) if not, the reasons therefor?

## ANSWER

## MINISTER OF PARLIAMENTARY AFFAIRS, COAL AND MINES (SHRI PRALHAD JOSHI)

(a) to (d):  A statement is laid on the table of the House.

****

## Statement in Reply to the Lok Sabha Starred Question No. *160 to be answered on 13.12.2023 regarding Rationalization of Coal Linkages.

(a):    Yes  Sir,  Coal  PSUs  are  in  constant  endeavour  to  reduce  production  cost  by  improving  in efficiency in their operations through adoption of mechanisation of its mines. In underground mines, Mass Production Technologies (MPT), mainly with Continuous Miners (CMs) and Highwalls (HW) mines are adopted. In opencast mines, State-of-the-Art technologies are adopted in high capacity Excavators,  Dumpers  and  Surface  Miners.  Digital  transformation  technology  has  also  been introduced on pilot scale in a few mega mines. Further, CIL has also adopted Mine Developer cum Operator  (MDO)  and  Long  Term  outsourcing  models  for  mines.  CIL  is  also  operationalizing abandoned/discontinued mines on Revenue sharing model. CIL is taking all efforts to increase its domestic production as well as offtake.

An increase in domestic production of coal would lead to reduction in dependence on imported coal by the industries. To make more domestic coal available and reduce import of coal, the following steps have been taken:

1. Auction of commercial coal blocks on revenue share basis
2. Operationalisation of new mines and expansion of existing coal mines
3. Regular monitoring with relevant states and district authorities
4. Issuance of New Coal Linkage for New Power Plants.
5. Thrust is being made to offer large quantities of domestic coal through various format of eAuctions so that the consumers are not inclined towards import of coal.
6. Increased Supplies
7. Flexibility has been given to NRS Linkage consumers for change of mode from Rail to Road in view of high pendency of rake supply.

The Import of Coal during last two years and current years is given below:

| (Quantity in Million Tonne &Value in Million Rs. and $ )   | (Quantity in Million Tonne &Value in Million Rs. and $ )   | (Quantity in Million Tonne &Value in Million Rs. and $ )   | (Quantity in Million Tonne &Value in Million Rs. and $ )   | (Quantity in Million Tonne &Value in Million Rs. and $ )   | (Quantity in Million Tonne &Value in Million Rs. and $ )   | (Quantity in Million Tonne &Value in Million Rs. and $ )   | (Quantity in Million Tonne &Value in Million Rs. and $ )   | (Quantity in Million Tonne &Value in Million Rs. and $ )   | (Quantity in Million Tonne &Value in Million Rs. and $ )   |
|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|
| Year                                                       | Coking Coal                                                | Coking Coal                                                | Coking Coal                                                | Non Coking Coal                                            | Non Coking Coal                                            | Non Coking Coal                                            | Total Coal                                                 | Total Coal                                                 | Total Coal                                                 |
| Year                                                       | Quantity                                                   | Value Rs.                                                  | Value ($)                                                  | Quantity                                                   | Value Rs.                                                  | Value                                                      | ($)Quantity                                                | Value Rs.                                                  | Value ($)                                                  |
| 2021- 22                                                   |                                                            | 57.121027908.3513757.08                                    |                                                            |                                                            | 151.501259932.89                                           | 16871.79                                                   | 208.63                                                     | 2287841.2430628.87                                         |                                                            |
| 2022- 23                                                   |                                                            | 56.051538399.7419285.76                                    |                                                            |                                                            | 181.622297444.02                                           | 28749.17                                                   | 237.67                                                     | 3835843.7648034.94                                         |                                                            |
| 2023- 24- Sep-23                                           | 29.39                                                      | 628405.11                                                  | 7628.80                                                    | 95.82                                                      | 866782.03                                                  | 10520.49                                                   | 125.21                                                     | 1495187.1418149.29                                         |                                                            |
| 2022- 23- Sep-22                                           | 28.71                                                      | 915212.2811706.83                                          |                                                            |                                                            | 103.161397748.51                                           | 17809.11                                                   | 131.86                                                     | 2312960.7929515.95                                         |                                                            |
| Growth %                                                   | 2.40                                                       | -31.34                                                     | -34.83                                                     | -7.12                                                      | -37.99                                                     | -40.93                                                     | -5.04                                                      | -35.36                                                     | -38.51                                                     |

Source: DGCI & S, Kolkata

The CAGR of coal production from 2008-09 to 2013-14 was only 2.8%. This has now taken a jump to 5.2 % from 2014-15 till 2022-23. Had the production continued at 2.8%, it would have been around 725.39 MT. Presently the production during 2022-23 has been 893.19 MT. The difference of 167.80 MT would have been imported.

(b), (c) and (d): Rationalization of coal linkages is a policy initiative of Ministry of Coal in order to reduce  the  distance  in  transportation  of  coal  from  the  coal  mines  to  the  consumer.  Coal  linkage rationalization in power sector has resulted in decrease in transportation cost from the mines to the power plants leading to more efficient coal-based power generation. The exercise helps in reducing the load on the transportation infrastructure, easing the evacuation constraints, reduction in landed cost of coal and reduction in the cost of power.

The  linkage  rationalization  for  State/Central  PSUs  was  implemented  initially,  based  on  the recommendation of Inter-Ministerial Task Force (IMTF) which was constituted in June, 2014. The linkage  rationalization  for  State  /  Central  PSUs  was  implemented  initially,  based  on  IMTF recommendation.

Thereafter, Coal India Limited (CIL) had rationalized coal company-wise linked quantity based on the request of State / Central Gencos and with a view to optimize the transportation cost.

Another IMTF was constituted in July, 2017 to rationalize the linkages of the Independent Power Producers (IPPs). The methodology for rationalization of coal for IPPs/Private sector plants was also issued on 15.05.2018. Under this policy, three rounds of linkage rationalization have been conducted for State & Central Gencos & IPPs.

Till date, rationalization for a quantity of about 86 Million Tonnes (MT) has been executed through FSA  amendment.  Keeping  in  view  the  benefits  of  rationalization,  Coal  India  Limited  has  been requested to commence further rounds of linkage rationalization in terms of the methodology dated 15.05.2018 on a regular basis.

An IMTF was also constituted in October, 2018 to examine the possibility of further rationalization of coal linkages, including Swapping of imported coal being transported to hinterland with domestic coal transported  near  coastal  areas.  The  methodology  was  accepted  by  the  Government  and  issued  on 05.06.2020, which covers the Power as well as Non-Regulated Sector (NRS) and coal swapping with imported coal has also been permitted.

The State/UT wise details of the rationalization implemented is given in Appendix.

The State/UT wise details of the rationalization implemented -

| State/UT       | Name of the Plant           | Earlier Source   | Rationalized Sources   |
|----------------|-----------------------------|------------------|------------------------|
| Andhra Pradesh | Simhadri                    | MCL              | ECL                    |
| Assam          | Bongaigaon                  | NEC              | ECL                    |
| Delhi          | IGTPP                       | MCL              | NCL                    |
| Gujarat        | GANDHINAGAR                 | SECL             | WCL                    |
|                | Ukai                        | SECL             | WCL                    |
|                | WANAKBORI                   | SECL             | WCL                    |
| Haryana        | APCPL, Jhajjar              | MCL              | CCL                    |
|                | HPGCL                       | MCL/ECL          | CCL                    |
|                | Mahatma Gandhi TPP Jhajjar  | ECL              | NCL                    |
|                | PANIPAT                     | NCL/WCL          | CCL                    |
|                | RG TPS, Hissar              | MCL              | CCL                    |
| Jharkhand      | KODERMA                     | ECL              | BCCL                   |
|                |                             | MCL              | CCL                    |
| Karnataka      | Raichur                     | MCL/ WCL         | WCL/ MCL               |
| Madhya Pradesh | Bina TPP                    | CCL              | NCL                    |
|                | MPPGCL                      | SECL/WCL         | WCL/SECL               |
|                | Satputa TPS                 | SECL             | WCL                    |
|                | Seoni TPP                   | MCL              | NCL                    |
|                | Shree Singhajee St-I        | SECL             | NCL                    |
| Maharashtra    | Bhusawal                    | MCL              | SECL                   |
|                | Chandrapur                  | SECL             | MCL                    |
|                | KHAPERKHEDA                 | MCL              | SECL/WCL               |
|                | MAHAGENCO                   | MCL              | WCL                    |
|                | MOUDA                       | MCL              | SECL WCL               |
|                | PARLI                       | MCL              | WCL                    |
| Punjab         | Rajpura TPP Nabha Power     | SECL             | NCL                    |
|                | Ropar, PSPCL                | BCCL             | CCL                    |
|                | Talwandi Sabo Power Limited | MCL              | NCL/SECL               |
| Rajashthan     | KOTA                        | SECL             | NCL                    |
|                | SURATGARH                   | NCL              | SECL                   |
| Tamil Nadu     | TANGEDCO                    | MCL              | WCL/CCL                |
|                | Tuticorin                   | CCL              | MCL                    |
| Telengana      | KOTHAGUDAM                  | MCL              | SCCL                   |
|                | RAMAGUNDAM                  | MCL/SECL         | SCCL                   |
| Uttar Pradesh  | Bajaj Energy Limited        | CCL              | NCL                    |
|                | Meja Urja Power Nigam Ltd   | SECL             | NCL/CCL                |
|                | UPRVUNL                     | BCCL             | NCL/SECL               |
| West Bengal    | BAKRESWAR                   | MCL              | BCCL                   |
|                | DPL                         | MCL              | BCCL                   |
|                | DSTPS                       | CCL              | MCL/ECL                |
|                | Durgapur Projects Ltd       | MCL              | ECL                    |
|                | Farakka                     | NEC              | ECL                    |
|                | KOLAGHAT                    | MCL              | BCCL                   |
|                | MEJIA                       | MCL              | ECL                    |
|                | WBPDCL                      | BCCL             | CCL                    |
|                |                             | MCL              | ECL/CCL                |

*****