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Coal Ministry prepares draft norms on coal block allocation

The governmnet will auction coal blocks, whose allocation was cancelled by the Supreme Court, only to specified end-users, Coal Secretary Anil Swarup said.

The coal ministry today issued much-awaited draft guidelines for e-auction of 74 coal blocks of the 200 odd coal blocks that had been cancelled by the Supreme Court. Out of these, 32 will be new blocks and 42 blocks are currently operational. Two months earlier, the Supreme Court cancelled the allotment of 204 mines since 1993 terming them "arbitrary and illegal".

The government will auction coal blocks, whose allocation was cancelled by the Supreme Court, only to specified end-users, Coal Secretary Anil Swarup said in a media briefing.

He further added that bids for coal blocks are likely to be auctioned in the first phase and will be due on February 11. PSUs can also bid for additional blocks apart from allotted blocks. The reserve price will be announced by late December and coal blocks could be awarded by March 16.

Essentially, the process will be completed by the end of this financial year. Swarup also clarified that coal block auction is not a revenue maximisation exercise and the government is keen that tariffs don't rise. Also, in an attempt to avoid monopoly, a cap will be put on the number of blocks a company can bid for.

The e-auction of coal blocks will have a two-stage tender process of technical and financial bids. Also Read: Possible to stop imports of thermal coal in 2-3 yrs, says Goyal The government is confident that this auction will get good response. The draft rules seek stakeholders comments by November 24.

It say that the Centre will issue an order to the Nominated Authority specifying which coal mines are to be auctioned and which are to be allotted to the government companies.

Sharing views on these guidelines, the Giriraj Daga, senior research analyst, Nirmal Bang said that the key thing to note is that the ministry is very firm on the timeline. “We are also very confident that before March 31 they will get the auction completed.

So, we don’t expect that there would be a shortage of coal for any of the plants.” He is also confident that broadly all companies will get coal mines back. “It might be different coal mine; it might be in a nearby area since the number of coal mines is large in the auction,” he added.

Source: Moneycontrol