New Delhi | February 8, 2016: State-owned Coal India will provide short-term linkages to the end-use plants of those central and state PSUs, both in power and non-power sector, whose coal blocks could not begin production.

The development comes after government approved allocation of coal linkages to non-regulated sectors such as steel and cement through the auction route.

"The proposal for grant of 'Bridge Linkage' to specified end use plants of central and state public sector undertakings (both in power as well as non-power sector) which have been allotted Schedule-III coal mines under the Coal Mines (Special Provisions) Act, 2015 (CM(SP) Act)...

"... And coal blocks allotted under the Mines and Minerals (Development and Regulation Act, 1957 (MMDR Act) has been examined in the Ministry," Coal Ministry said in a notification.

"With approval of the competent authority, policy guidelines (for grant of bridge linkage) have been finalised," it said.

Bridge Linkage to be granted for a period of three years shall act like a short-term linkage to bridge the gap between requirement of coal of a specified end use plant of central and state PSUs and the start of production from the linked allotted coal mine, it added.

"Only Schedule-III coal mines and coal blocks allotted under MMDR Act will be considered. Since mines included in Schedule-II of the CM(SP) Act, 2015 are "producing" or "ready to produce" coal mines, no 'Bridge Linkage' shall be granted to specified EUPs of such mines under any circumstances," it said.

Bridge Linkage would not be provided to specified end use plants of private sector which have won coal mines after bidding under-auction route since it would amount to change in bid conditions of coal mines and there was no such condition to provide tapering linkages in bidding documents of coal mines auctioned.

"As there are constraints in availability of coal and in view of negative coal balance, CIL (Coal India)/SCCL shall endeavour to supply 75 per cent of 'Agreed Requirement' of coal where 'Agreed Requirement' is calculated at 90 per cent of normative requirement of the plant at 85 per cent PLF," it said.

"There shall be no minimum assured quantity. Coal will be supplied on 'best effort basis' after meeting existing contractual obligations of coal companies," it added.

In a bid to ensure coal supplies and a level playing field to non-regulated sectors such as steel and cement, government had said last week that coal linkages will be provided to them only through auctions, which will kick off later this month.

(Source: http://www.business-standard.com/)