Policy on swapping of coal linkages on cards

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26 Aug, 2025 12:21

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The Coal Ministry has said it is planning to formulate a policy for swapping of coal linkage between State utilities and Central power utilities, a move that may help in augmenting the fuel availability and reduce transportation charges.

The development comes at a time when the demand-supply gap of coal is widening in the country. "At this point of time, a policy is to be formulated regarding swapping of coal," according to Coal Ministry. This follows the request being received from the Power Ministry in the recent past for swapping the linkages between two entities.

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"Request has been received from the Ministry of Power for allowing swapping of coal...for bridging the gap between coal requirement and availability of domestic coal and to minimise the transportation cost and to avoid criss-cross movement in the over congested railway network," the document said. At present, coal linkages given to companies are exclusive to a particular project. These linkages are non-transferable even between group companies.

The matter, according to a source, had also come up for discussion at the meeting of the Standing Linkage Committee held recently. It was discussed during the meeting that in the event of the policy being framed, each proposal of swapping shall be decided on case to case basis, depending upon merits and there shall be no automatic route for swapping between two entities.

"The proposed swapping of coal should be allowed between state Power Utilities and also between State and Centre power utilities only. No such swapping shall be allowed for private parties," the source said. It was also deliberated that Coal India shall examine each proposal for availability of coal and feasibility of movement, before the matter is taken up further.

The demand-supply gap of coal touched 171 million tonnes in 2013-14 financial year, which was met through imports.