India MMTC to re-issue coal tender soon-source

NEW DELHI Aug 19 (Reuters) - India's MMTC Ltd (MMTC.BO) will soon re-issue a tender to import 12.5 million tonnes of thermal coal with new rules aimed at enhancing competition, a company source said on Wednesday.

"It will be re-issued any time. The issue is pending with the commerce ministry. As soon as we get clearance we will issue the tender," said the source, who spoke on condition on anonymity.

"We hope it would be re-issued sometime this week", the source added.

The source said new tender rules would allow bids by any firm that had supplied 2 million tonnes of coal in a year to companies from specified industries like steel, power and cement.

Earlier only firms that previously had supplied 2 million tonnes of coal in a year to an Indian firm were eligible to bid.

Also, a deposit requirement had been fixed at 4 percent of the contract value compared to differential rates earlier.

"There could be some changes on division of volumes among traders but that will be clear once we get comments from commerce ministry," the source said.

MMTC had issued a tender in May to import 12.5 million tonnes of coal for power producer NTPC Ltd (NTPC.BO). But the tender could not be awarded after Knowledge Infrastructure Systems complained that some tender terms meant only trader Adani would qualify. [ID:nLE494747]

Coal-fired plants account for two-thirds of power generation in India and any delays to coal procurement will exacerbate India's shortage of fuel for power generation.

NTPC chief R. S. Sharma on Tuesday said his firm had asked MMTC to begin supplying coal in a month's time.

Power Secretary H.S. Brahma on Tuesday said current coal stocks at plants average 8-10 days against a normal 15-21 days.

India missed its power generation target in the previous two financial years due to fuel shortages, Junior Powar Minister Bharatsinh Solanki had said last month.

The Central Electricity Authority has projected energy shortage of 9.3 percent or 78,429 mega units (MU) and peak power shortages of 12.6 percent or 14.98 GW in 2009/10. (Reporting by Nidhi Verma; Editing by John Mair)