After a gap of three years, the Coal Ministry is all set to allocate blocks for which it has finalised three routes. For private companies having specified end use other than power generation, the allocation would be done by auction through competitive bidding, while blocks for corporate entities requiring them for electricity generation would be given through tariff-based bidding. And thirdly, the State owned units would be given reserves through Government dispensation route for commercial mining purposes.
Official sources told The Pioneer that all the three routes were finalised in a recent meeting held by top Coal Ministry officials. The meeting was attended by State Government representatives. On June 22, the policy was also discussed in a meeting held by Prime Minister’s Principal Secretary Pulok Chatterjee. Coal Secretary SK Srivastava and Coal India Ltd chairman Mr S Narsing Rao also attended the meeting.
Sources said that there are possibilities of further fine-tuning. In the meantime, Crisil which has recently been appointed as consultant by the Ministry for this purpose would prepare the methodology for calculating the price of coal blocks and draft the standard bid document. Also it would finalise the agreement which would be signed between the Coal Ministry and the allocatee after the allotment of the block.
It has been given three-month time to prepare these documents, sources said, adding that the methods for coal blocks allocation decided in the meeting would form the yardstick for all future allocations.
Sources in the know said that for allotting blocks for power generation to be done through tariff-based competitive bidding, there would be no bidding for coal blocks meant for power separately. The identified blocks earmarked for allocation to the power sector would be further earmarked to the Power Ministry or the State Governments for carrying out tariff-based bidding, they added.
The Ministry has also decided that allotment of blocks to State mining development corporations for commercial mining, aimed at supplying to consumers in States, would be done on the basis of fuel supply agreement (signed between CIL and State bodies).
Also called the Government dispensation method, official sources informed that under it, blocks would be given to State owned mining or mineral bodies by a Screening Committee of the Coal Ministry (to be formed soon), which would be headed by Coal Secretary and will have representatives from related Ministries like Steel, Power and Mining. The allocatee will be selected on the basis of financial capability and net worth.
The decision by the Ministry assumes significance in the light of the fact that since 2009 it has not allocated a single coal block. Rather it has de-allocated a number of blocks given to various entities in the last one year due to their non-usage by the concerned parties.
The Ministry would be auctioning a total of 54 blocks through the aforementioned routes. Though some of these have been mined earlier to an extent, a majority of them are virgin blocks. Therefore their exact capacity is not known and the Ministry would be thrashing out ways to generate greater interest in these "new" blocks among the prospective bidders.
Source - Daily Pioneer
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