The Coal Ministry’s target to auction 54 mines only after ‘in-principle’ environment and forest clearances are obtained is set to hit procedural hurdles, delaying the bidding process.
“In case of pre-approvals, the bidding would be set back by three-four years, as the Government does not have any set-up in place to take the required clearances,” a senior Coal Ministry official involved in the process said.
The ground reality hit home when the Coal Ministry sat down to discuss the issue with the Power and Steel Ministries and other stakeholders last week. Both the Ministries, along with private power producers and the Sponge Iron Manufacturers Association, felt that the blocks for auction should come up with all approvals in place, at least with regard to in-principle forest clearance.
It was felt that “ there is need to set up a specialised department that will be tasked with taking approvals for all coal blocks,” the official said.
Learning from the flop-show of the 2G telecom spectrum licence auction, the Government had firmed up that blocks loaded with ‘in-principle’ clearances would fetch a better floor price, as getting the green nod was proving to be a major roadblock.
The key stages in the development of a mine include submission of the mine plan and its approval, followed by forest and environment clearance and land acquisition. Of these, obtaining forest and environment clearances and land acquisition have been the toughest for both public and private companies.
WITHOUT APPROVALS
However, the Government can put the blocks on auction without clearances, but the process would be dampener.
This is because the bidder would be asked to pay 25 per cent of the bid amount upfront and another 25 per cent after the mine plan approval.
This would mean that by the time the bidding company puts up an application for forest and environment clearances, it would have paid 50 per cent of the bid amount.
“In case, the company does not get the environment or forest clearance, the money paid by the bidder will need to be returned. Also, if the area of the block is reduced due to forest clearance, the bid amount needs to be re-negotiated,” the official said.
siddhartha.s@thehindu.co.in