Coal Linkage Auction Under CII Scanner to Bring More Transparency

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NEW DELHI: The Confederation of Indian Industry (CII) would ‘work-out’ on the possible impact on the small and medium enterprises (SMEs) if the coal linkage was allotted on auction basis.

The coal ministry is exploring the option of granting coal linkage on auction basis. The move was aimed to bring more transparency in the process of giving coal to the units on linkage model. The SMEs would however feel the impact as the big players in the sector would be at the advantageous position.

The Chhattisgarh SMEs mostly the sponge iron units had been procuring coal on the linkage basis from the South Eastern Coalfields Limited (SECL)—the largest coal producing company in the country having major coalfields in the state. The industrialists had also been purchasing coal from open market. But the linkage method was the sole sources of getting coal for the local units.

IndiaCSR_CSR_Training_Workshop NewThe big coal blocks had been bagged by the big players in the industry, leaving no room for the small ones. Since the auction price was very high, the small units failed to get coal blocks. The SMEs fear the same experience when coal linkage would also be allotted on auction basis.

“We will work on the issue (of the possible impact of coal linkage on auction)”  CII Eastern Region Chairman Rear Admiral A K Verma (Retd), said. The matter would be taken up at the National council level for discussion, he added.

Verma said during discussion with the Chhattisgarh members, the CII had identified the areas where it needed to make a push and remove the hurdles for the industries through parleys at the State and Centre levels. He added that the CII had given the slogan “Building East, Driving India” and was focusing on Chhattisgarh that had big potential for growth.

“The areas identified for thrust include defence and railway under manufacturing sector,” Verma said, adding that Information Technology (IT) and Tourism would also remain in focus for growth in Chhattisgarh.

The Confederation of Indian Industry (CII) would ‘work-out’ on the possible impact on the small and medium enterprises (SMEs) if the coal linkage was allotted on auction basis.

The coal ministry is exploring the option of granting coal linkage on auction basis. The move was aimed to bring more transparency in the process of giving coal to the units on linkage model. The SMEs would however feel the impact as the big players in the sector would be at the advantageous position.

The Chhattisgarh SMEs mostly the sponge iron units had been procuring coal on the linkage basis from the South Eastern Coalfields Limited (SECL)—the largest coal producing company in the country having major coalfields in the state.The industrialists had also been purchasing coal from open market. But the linkage method was the sole sources of getting coal for the local units.

The big coal blocks had been bagged by the big players in the industry, leaving no room for the small ones. Since the auction price was very high, the small units failed to get coal blocks. The SMEs fear the same experience when coal linkage would also be allotted on auction basis.

“We will work on the issue (of the possible impact of coal linkage on auction),” CII Eastern Region Chairman Rear Admiral A K Verma (Retd), said. The matter would be taken up at the National council level for discussion, he added. Verma said during discussion with the Chhattisgarh members.

The CII had identified the areas where it needed to make a push and remove the hurdles for the industries through parleys at the State and Centre levels. He added that the CII had given the slogan ‘Building East, Driving India’ and was focusing on Chhattisgarh that had big potential for growth.

“The areas identified for thrust include defence and railway under manufacturing sector”  Verma said, adding that Information Technology (IT) and Tourism would also remain in focus for growth in Chhattisgarh.

(The report first appeared with Business standard)

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