Coal India’s Gasification Scheme Concerns: Bidding & Costs

Coal India (CIL) has voiced significant concerns to the government, arguing that the Centre’s ₹37,500 crore coal-gasification incentive scheme’s rules could put it at a disadvantage compared to private sector competitors. The state-run company highlighted issues with the bidding timeline and incentive calculation.

CIL Flags Disadvantage in Incentive Scheme

CIL identified two primary issues within the regulations governing the new program. These relate to the bidding period and what costs qualify for incentives.

• A 60-day bidding window is deemed restrictive, potentially favoring entities that already possess pre-existing project reports.
• The exclusion of captive power plants from eligible project costs impacts the incentive calculation for CIL.

The coal ministry, however, rejected CIL’s request for an extended six-month application period. It confirmed that future bidding rounds would maintain the current two-month application window. The ministry also clarified that captive power plants would not be included in project costs for incentive purposes.

Understanding the Coal Gasification Incentive

The incentive program, which was launched in June, aims to provide crucial financial assistance. This support covers up to 20% of eligible plant and machinery costs.

• Total scheme value: ₹37,500 crore
• Maximum incentive per project: ₹5,000 crore
• Maximum incentive per corporate group: ₹12,000 crore
• Coal and lignite gasification target: Approximately 75 million tonnes by 2030

Coal India is currently evaluating these implications as it prepares its bids for the scheme. The final terms will shape the company’s participation and potential investment in the gasification initiative.