CIL fears coal gasification scheme will blunt its edge

New Delhi: Coal India (CIL), the country's largest coal producer, has told the government that rules for the ₹37,500-crore coal gasification incentive scheme could put it at a disadvantage to private rivals, citing a short bidding window and the exclusion of captive power plants from eligible project costs to calculate the incentive.

The state-run company sought six months for the first round of applications, arguing that the proposed 60-day window favours companies that already have project reports ready. The coal ministry rejected the request, noting that subsequent rounds of bidding will begin immediately after the previous round, with a two-month application period, closes.

A senior Coal India official noted that "applicants have to submit a board-approved feasibility report or project report along with their applications," giving "undue advantage" to companies whose DPR/PFR is already ready or under preparation.


The timeline matters because financial support for each product category is capped at ₹9,000 crore across applicants, meaning companies submitting "bids in the initial rounds could secure a larger share of the available support, while projects still completing feasibility studies may have to wait," the person told ET.

CIL has also questioned what costs can be counted while calculating the incentive.

The company asked whether a captive power plant, using rejects from a coal washery to supply electricity to a gasification unit, would qualify as part of the "project" and be included in the project cost and cost of plant and machinery used to calculate the incentive.

The ministry's answer was categorical, "No. Captive power plants do not fall under the definition of project."

The exclusion means capital spent on captive power would not form part of the eligible project cost for the incentive.

The official cited above explained that the incentive and inclusion are important for CIL, which is developing projects around its existing coal and washery infrastructure.

CIL - a Maharatna public sector company under the same ministry that framed the scheme - is one of the key potential developers of coal-gasification projects.

The company raised the objections during the ministry's pre-application conference for the scheme. It is now evaluating the implications as it prepares its bids under the scheme.