The Government expects to introduce competitive bidding for auctioning coal blocks by the end of financial year.
The Coal Minister, Mr Sriprakash Jaiswal, said his Ministry was in final stages of drafting the norms for competitive bidding, which would bring in transparency in the allocation process.
“We expect to finalise the guidelines soon,” Mr Jaiswal said without specifying any time frame for the process. He was speaking to reporters after a stakeholder consultation on the issue.
The Coal Ministry is in the process of identifying new coal blocks, which would be offered to end user companies in sectors such as power, cement and steel among others through the competitive bidding process.
“Preference will be given to Coal India based on its requirement, after which the remaining blocks will be offered through the bidding process,” Mr Jaiswal said.
In April, the Coal Ministry had come out with a draft paper on the competitive bidding process that had four set of options including upfront payment and production linked payment.
However, a common feature was that preference in allotment would be given to those bidders whose end-plants were in the same State as the coal blocks.
At present, coal blocks are offered to the end users on a preferential basis by an inter-ministerial screening committee. An amendment to the Mines and Minerals (Development and Regulation) Amendment Bill, 2010, in August last year paved the way for introduction of auction through competitive bidding for allocation of coal blocks to private companies for captive use.
Since 1993, the Coal Ministry has allocated a total of 214 captive blocks to some 307 companies in sectors such as power, steel and cement. The majority of these allocations were done after 2006.
According to initial projections, output from captive coal blocks was expected to touch 100 million tonnes by 2012, sources said.
However, the actual output stood at 34.6 million tonnes in 2010-11, belying the initial expectations.