“It’s wrong to say the government directed Coal India to take this step. We had made an appeal to the board, asking it to consider the option of cutting e-auction to increase fuel availability to power plants. The board has acceded to it and, in no way, refused,” Goyal said on the sidelines on an event.
He added the company board couldn’t take such decisions without consulting the government. CIL is a listed company, with an independent board of directors. The government has 89 per cent stake in it.
“I don’t know from where this rumour has spread that the CIL board has defied my decision. It’s not a decision; it is one of the measures we are looking at to increase coal availability to the power sector. Also, such decisions are not what CIL has to take alone,” Goyal said.
A CIL spokesperson didn’t respond to questions on the matter.
CIL, India’s largest coal producer, sells about 10 per cent of its production through e-auctions. Typically, companies in sectors such as cement, sponge iron and fertilisers buy through this route. These sales account for 15-20 per cent of the company’s revenue. Power generation companies keep away from this route as the coal is sold at high rates.
On several occasions, Goyal has said CIL has been asked to cut the amount of coal sold through e-auctions and make it available to power producers. “Large amounts of coal are being sold through e-auctions. This is not in public interest. Coal India’s primary duty is to supply to power plants,” he had said in the Rajya Sabha recently.
Following the annual general meeting of the CIL board last week, there were reports the company might go against the minister’s suggestion, fearing revenue loss. For 2012-13, CIL reported a profit of Rs 15,711 crore and sold 58 million tonnes through e-auctions, 31 per cent more than in the previous year. The prices, however, fell 13 per cent to Rs 2,196 a tonne.
This led to the total receipts from sale of coal through e-auction witnessing a slump of 28% to a realisation of Rs 600 per tonne on notified price.