The Coal Ministry kicked off the process of re-allotting mines, starting with central and state public sector units on Wednesday.
Coal Secretary Anil Swarup said all the 36 blocks earmarked for allotment will be offered for PSUs to cherry-pick from in a single phase. The Centre proposes to complete the whole process by February 20.
Priority will be given to PSUs with units close to the mines, Swarup added.
On the eligibility of State governments whose public sector companies haven’t paid the additional levy of ₹295 per tonne, Swarup said, “The Ordinance says that the entity that has to pay the levy is different from the State entity that we are going to allot the block… legally they are a different entity. So, State governments and their companies will be eligible.”
From Wednesday, notices will be sent to companies to assess the blocks. Only one block has been earmarked for the steel sector while the rest will be for power.
Interested companies will need to pay a fixed reserve price of ₹100 per tonne, payable as per actual production. Yearly escalation of the reserve price will be based on the formula spelt out in the Standard Bid Documents.
In addition, the PSUs will also be required to pay the statutory royalty and the upfront payment (to compensate the previous allocattee) as per the allotment document.
Meanwhile, for the remaining 62 blocks to be auctioned, Swarup said the process is going as per plan.
Out of the 62 blocks, auctions for 46 will be completed first, while for 16 the Centre is getting more details.
Swarup said for the 23 mines in Schedule II — producing mines — so far 87 distinct bidders have bought 224 forms. For the Schedule III mines — ready to produce — 39 companies have purchased 82 forms.
This indicates that there will be reasonable competition during bidding.
The auction for the 23 Schedule III mines is expected to be held between February 22 and 24 and vesting orders for the same are expected to be given by April 2, Swarup added.
The Centre has also tweaked the bidding norms for coal block auctions.
In the power sector, where the reverse bid process is being followed, if multiple players bid at nil rates, then the player giving the highest bid on auction price will emerge the winner.