Coal news and updates

Coal block e-auctions in February

"The first lot 74 blocks will be auctioned, but the number of mines a company can bid will be capped to avoid monopoly."

The government on Wednesday issued draft guidelines for e-auction of coal blocks cancelled by the Supreme Court. The auctions, Coal Secretary Anil Swarup said will begin on February 11.

“The bid due date would be around February 11. We hope to finalise the technical bid qualification by March 3. The auction will get moving on March 6 and we hope that by March 16, we should be able to issue a vesting order,” Mr Swarup said.

No power tariff hike

Announcing a timeframe for the e-auction of coal blocks cancelled by the Supreme Court in September, Coal Secretary Anil Swarup on Wednesday said the government is putting in place a system to ensure power tariffs do not rise.

Mr Swarup said, “Coal block auction is not a revenue maximisation exercise…It is our endeavour that power tariff does not rise due to auction. We are in the process of evolving a system, which has not been finalised yet… It is essential to keep a lid on tariff,” the Secretary said.

The Supreme Court had cancelled the allotment of 204 mines allotted since 1993, terming them “arbitrary and illegal”.

Cap on allotments

In the first lot, 74 blocks will be auctioned, but the number of mines a company can bid will be capped to avoid monopoly, the Secretary added. Additionally, the mines will be allocated only for specified end-use like power generation.

The e-auction of coal blocks will have a two-stage tender process of technical and financial bids, as per the draft rules, which seek stakeholders’ comments by November 24.

The Central Government will issue an order to the Nominated Authority specifying which coal mines are to be auctioned and which are to be allotted to Government firms.

The Nominated Authority, will prepare a ‘Mine Dossier’ containing particulars of geographical area, coal reserves, mine infrastructure, approvals, permits, etc. for each mine. The Centre has already appointed Joint Secretary, Coal, Vivek Bhardwaj as the Nominated Authority.

Further, the rules state, “Eligibility to bid for Schedule II & III coal mines shall be dependent on the status of preparedness of their end use plant -- 80 per cent of investment made in the EUP for Schedule II mines and 60 per cent of investment made in the EUP for Schedule III mines.”

Source: The Hindu