Economic Times reported that government plans to allow Coal India Limited and its subsidiaries to produce coal bed methane from their blocks without any competitive bidding.

Officials in the petroleum and coal ministries said that the state run firm will be granted an exception to the existing norms that requires the government to invite bids from public and private firms for producing gas trapped in coal seams under the CBM policy. So far, 33 blocks have been awarded to companies such as ONGC, Reliance Industries and Essar in four auction rounds.

Officials with direct knowledge of the matter said that the government wants to harness the gas trapped in coal seams in blocks already allotted to state miners for producing coal.

One official said requesting anonymity that "The issue will be decided by the Cabinet soon. The government is in favour of allowing only state-run miners having coal mining licenses to produce CBM to avoid criticism that the policy gave undue benefits to private firms.”

Besides CIL other firms that will get this special dispensation are its subsidiaries including Eastern Coalfields Ltd, Bharat Coking Coal Ltd and Mahanadi Coalfields Ltd.

Officials said that Coal India which initially expressed its reservations in signing separate contract with the oil ministry for producing CBM, has now agreed.

Source - Economic Times

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