The Planning Commission has raised questions on the Coal Ministry’s move to allocate mines to Government companies through special dispensation route. In other words the Government companies need not participate in the auctions.
Questions raised by the Planning Commission include determination of reserve price of blocks, criteria for giving additional mines where the firm(s) has already being allocated in the past and issues related to mine closure.
“The terms and conditions given are not clear on the process of auction for Government companies. It needs to be clarified whether methodology used to determine reserve price of the coal resource for private companies is also applicable for the Government firms. If so, then how this process will be different from the process adopted for private companies,” a senior Planning Commission official told Business Line.
Coal Minister Sriprakash Jaiswal said on Friday, “Transparent bidding process (that Ministry intends to launch) is not for Government dispensation.” The Minister said that Government would also offer priority to companies such as NTPC whose blocks have been de-allocated in the past.
The Planning Commission in a recent communication to Coal Ministry has sought clarity on the issue that if a participating Government company already acquired blocks, then what would be the justification criteria to allow the company to apply for more blocks?
“The Government firms should also give specific progressive requirement over a period for life cycle of the end use plant. The allocation process needs to consider the demand projections for the specified period,” the Planning Commission official said.
The Plan Commission has also flagged an interesting issue wherein the coal bearing States have raised concerns on allocation of mines to companies that belong to another coal bearing State. States have been arguing that coal block in their state should not be allocated to a company from other coal bearing state.
“Preferable option should be to allot block to a company in the same State, where it is located. This issue must be clarified to prevent disputes between States,” the official added.
The Commission has also pointed out that present draft terms do not include directions with regards to mine closure, both progressive and final.
Coal Ministry is preparing grounds to auction 54 coal blocks with about 18.22 billion tones. Out of these, the Ministry has categorised 16 blocks with 7.2 billion tonnes to be given to Government companies.