Executive Summary:
This document is a response to Lok Sabha Starred Question No. 47 regarding degraded coal supply by Coal India Limited (CIL). It addresses concerns raised by the Comptroller and Auditor General (CAG) and consumers regarding coal quality and transparency in sampling. The Ministry of Coal outlines measures taken to ensure fair practices and resolve grievances related to coal grade slippage. The statement references actions since July 2023.
Key Points / Main Content:
Addressing Coal Quality Concerns:
* A Standard Operating Procedure for Third Party Sampling Analysis (TPSA) at the loading end was introduced on 26.11.2015.
* Independent Third Party Sampling Agencies (TPSAs) conduct coal sampling at the loading end.
* The Coal Controller Organisation (CCO) declares the grade (GCV) of coal annually.
Grade Variation and Adjustment:
* Due to the nature of Indian coal, grade may vary between consignments.
* Grade differences are adjusted using Debit and Credit Notes based on TPSA referee lab analysis.
* This mechanism ensures consumers do not incur losses from coal grade slippages.
CAG and Grievance Resolution:
* CAG flags coal quality issues during annual audits.
* No CAG paragraphs related to coal grade slippage are currently pending.
* CIL received 186 consumer grievances related to coal quality since July 2023, with 171 resolved.
* Grievance resolution is ongoing according to established procedure.
Transparency in Collection and Analysis:
* CIL subsidiaries follow a transparent process for coal collection and analysis.
* Consumers can choose from empaneled TPSAs for Third Party Sampling.
* The RFP/Model Tripartite Agreement includes clauses to ensure transparency:
* Seller and Purchaser representatives can witness sample collection and preparation.
* Samples are sealed in tamper-proof metal bottles with security features.
* Online tracking is provided for all stages of sample handling.
* Software-based double blinding is used for NABL accredited laboratory analysis.
* Sample handling is under CCTV surveillance with live streaming.
Impact Analysis
Coal Consumers:
* Impact: Protection from financial losses due to coal grade slippage through debit/credit note mechanism. Assurance of transparent coal sampling and analysis processes. Opportunity to raise grievances and expect resolution.
* Action Required: Utilize the TPSA mechanism and grievance resolution procedures if coal quality issues arise.
Coal India Limited (CIL) Subsidiaries:
* Impact: Must adhere to the Standard Operating Procedure for Third Party Sampling Analysis, transparent coal collection and analysis processes, and the grievance resolution procedure.
* Action Required: Implement and maintain transparent coal collection and analysis processes. Resolve consumer grievances related to coal quality in a timely manner.
Third Party Sampling Agencies (TPSAs):
* Impact: Responsible for conducting impartial and transparent coal sampling and analysis.
* Action Required: Adhere to the RFP/Model Tripartite Agreement, including ensuring secure sample handling, online tracking, and double blinding for laboratory analysis.
Coal Controller Organisation (CCO):
* Impact: Responsible for declaring and notifying the grade (GCV) of coal on an annual basis.
* Action Required: Continue to declare and notify the grade (GCV) of coal on an annual basis.
Key Entities Referenced
Coal India Limited: A government-owned coal mining and refining company in India.
Comptroller and Auditor General: The Supreme Audit Institution of India, responsible for auditing the accounts of the Union and State governments.
Ministry of Coal: The Indian government ministry responsible for the exploration and development of coal and lignite reserves in India.
Shri Shyamkumar Daulat Barve: Member of Lok Sabha who asked the starred question.
Shri G. Kishan Reddy: Minister of Coal and Mines who provided the answer to the Lok Sabha question.
Lok Sabha: The lower house of the Parliament of India.
Third Party Sampling Agencies: Independent agencies contracted to sample and analyze coal quality.
Coal Controller Organisation: An organization responsible for declaring and notifying the grade GCV of coal on an annual basis.
GOVERNMENT OF INDIA
MINISTRY OF COAL
LOK SABHA
STARRED QUESTION NO. *47
TO BE ANSWERED ON 23.07.2025
Degraded Coal Supply by Coal India Limited
†*47. Shri Shyamkumar Daulat Barve:
Will the Minister of Coal be pleased to state:
(a) whether Comptroller and Auditor General (CAG) found many cases of degraded coal
supply by Coal India Limited (CIL) to its consumers repeatedly during the last five years
causing financial loss to power companies/other consumers;
(b) if so, the details thereof along with number of complaints received by CIL during the last
five years along with the action taken thereon;
(c) whether it is a fact that according to CAG, consumers have suffered losses to the tune of
thousands of crores of rupees due to grade slippage in some of the coal companies of CIL and
if so, the details thereof; and
(d) whether it is a fact that there is severe lack of transparency in the process of collection and
analysis of coal by the subsidiaries of CIL and the third party sampling or impartial laboratory
reporting is not being done and if so, the details thereof?
ANSWER
MINISTER OF COAL AND MINES
(SHRI G. KISHAN REDDY)
(a) to (d): - A Statement is laid on the table of the House.STATEMENT REFERRED TO IN REPLY TO PART (A) TO (D) OF LOK SABHA
STARRED QUESTION NO. *47 FOR ANSWER ON 23.07.2025 ASKED BY SHRI
SHYAMKUMAR DAULAT BARVE:
(a), (b) & (c): To address concerns of the coal consumers regarding quality of coal supplied
by the coal companies, a Standard Operating Procedure for Third Party Sampling & Analysis
of coal at the loading end, was introduced by Ministry of Coal vide directives dated 26.11.2015.
Sampling of coal at the loading end is conducted through Independent Third Party Sampling
Agencies (TPSAs).
The Coal Controller Organisation (CCO) declares and notifies the grade (GCV) of coal on
annual basis. Due to inherent heterogeneous characteristics of Indian coal and during mining
of coal in the actual mining process, the grade of dispatched coal may vary from consignment
to consignment as compared to the coal grade declared by the CCO. This difference in grade
is later adjusted with the finally accepted GCV (analyzed by the Third Party Sampling
Agencies/ referee labs, as applicable). In case of up-gradation of billed grade, Debit Notes are
issued, whereas, in case of down-gradation of billed grade, Credit Notes are issued. The
mechanism of issuing Debit Notes and Credit Notes ensures that there is no loss to consumers
for coal grade slippages, if any.
Comptroller and Auditor General (CAG) flags the issues related to quality of coal supplied by
Coal India Limited during the course of annual audits. At present, no CAG paragraphs related
to coal grade slippage are pending.
However, since July 2023, CIL has received 186 consumer grievances (other than CAG
paragraphs) pertaining to coal quality related issues, out of which 171 grievances have been
resolved. Resolution of these grievances is a continuous process and is as per established
procedure.
(d): All the subsidiaries of Coal India Limited follow a transparent process of collection and
analysis of coal. Their consumers can choose any of the TPSAs empaneled for the purpose of
Third Party Sampling.
To ensure transparency in the process of collection and analysis of coal by the TPSA, following
clauses are provided in the RFP/Model Tripartite Agreement (signed between Seller, Purchaser
& TPSA) and Fuel Supply Agreements (FSAs):
i. The representative(s) of the Seller and Purchaser can witness the process of sample
collection and preparation at loading point.
ii. The sample for testing by TPSAs/Referee Samples are packed and sealed in temper-
proof metal bottles with 3D Holograms, QR Codes and RFID tags at coal sampling site
itself.
iii. Online tracking of samples at all stages is provided from sample preparation to analysis
at Agency laboratory and referee laboratory.
iv. Software system-based double blinding of coal samples is ensured for sending the same
to NABL Accredited laboratory.
v. Sample collection, preparation and storage is under CCTV Camera with live streaming
facility.
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