New Delhi, Feb 3 : The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, has given its approval that all allocations of linkages/Letter of Assurance (LoAs) for non-regulated sector viz. Cement, Steel/Sponge Iron, Aluminium, and Others [excluding Fertilizer (urea) sector], including their CPPs, shall henceforth be auction based.
The tenure of Fuel Supply Agreement (FSA) will be as decided by Ministry of Coal from to time.
The framework attempts to make the coal available in a fair manner to the end-users. The proposed auction methodology leads to the price through a market mechanism; it does not seek to maximize revenue.
It ensures that all market participants of non-regulated sector have a fair chance to secure coal linkage, irrespective of their size.
The auction of coal linkages is transparent, and creates a level playing field. It ensures that all market participants have a fair chance to secure the coal linkage, irrespective of their size. It attempts to ensure an optimal allocation of coal across user industries and geographies.
