CGAI actively participated in the stakeholders discussions for finalization of incentive scheme for coal gasification projects in the country under the coal gasification mission of the government of India.
Ministry of Coal shared the proposed incentive scheme for coal gasification projects which amongst others included Viability Gap Funding (VGF) scheme. Ministry of coal requested CGAI to give its comments on the proposed incentive scheme before it is announced.
- CGAI has suggested VGF release methodology in installments to ministry of coal considering the important milestones of payment and completion of a typical major project as per industry practice.
- CGAI also suggested that Ministry of coal should consider appropriate weightage to bidders who have proven experience and have implemented such projects, this will ensure successful implementation of projects.
- CGAI also suggested that ministry of coal should fully utilize the VGF amount earmarked for coal gasification. In case there the funds earmarked for category A are not fully utilized, the same should be carried forward and added to category B for full utilization of VGF scheme.
- CGAI also requested to relook into the norms for calculating the quantity of coal required for gasification considering the fact that no gasification process can operate on standalone basis and would need coal of same quality, washing of coal, crushing to appropriate size for feeding into the gasifiers as also coal will be required for utilities like captive power generation, oxygen plant, gas separation units etc. Therefore coal quantity calculations should include the entire quantity.
- CGAI has also requested ministry to help offtake of the products of gasification for initial period to help projects to stabilize.
Members of the association are requested to look into these issues and suggest if any other issue is to be taken up with the ministry of coal with respect to the incentive scheme/VGF proposed for coal gasification projects.