Govt mulls new coal block auction policy
Amidst the coalgate controversy and the ongoing CBI investigation into it, the government is likely to consider a new coal block auction policy for private steel, cement and power firms on Tuesday.
The matter is high on the agenda of the meeting of the Cabinet Committee on Economic Affairs (CCEA), which will meet on Tuesday. If the new policy is cleared, it will pave way for allotment of coal mines through competitive bidding for the first time in the country.
Sources in the government said, if the CCEA at its meeting, which will be chaired by Prime Minister Manmohan Singh, gives nod to the policy, four coal blocks with nearly 2,000 million tones of estimated reserve may be put on auction in next two months.
The CCEA would discuss a few crucial issues about the coal auctioning policy including giving power companies discounts, pricing of blocks and issue of comfort letter for environment and forest clearances, the sources added. The coal ministry is fast-forwarding exploration of coal blocks to determine reserves so that more mines can be put out on auction. “It is difficult to auction un-explored blocks. Generally, exploration of each block takes at least two years,” sources said.
The coal ministry undertook extensive consultations and groundwork before putting the draft policy together amid the uproar on the alleged coal block allocation scam. As per the policy, the government can allocate coalmines under three routes.
First, through auction to private companies, second to government owned companies by dispensation and third to power companies on tariff-based bidding. The new policy guidelines would be applicable to the first and third categories of allocation routes, sources said.
The coal ministry proposes to link the floor price of coal blocks to be put on offer for private companies to the global index.
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