The Coal Ministry has finally issued much-awaited draft guidelines for e-auction of 74 coal blocks of the 204 odd coal blocks that had been cancelled by the Supreme Court. Out of these, 32 will be new blocks and 42 blocks are currently operational. The draft rules seek stakeholders comments by November 24. The Centre will issue an order to the Nominated Authority specifying which coal mines are to be auctioned and which are to be allotted to the government companies.
Coal Secretary Anil Swarup detailing about the draft guidelines said that government will auction coal blocks, whose allocation was cancelled by the Supreme Court. As per Coal Secretary separate teams were discussing options to deal with various issues. A mechanism would be put in place to protect power consumers. He further elaborated that only companies with specified end-use plants for producing power steel, cement or sponge iron would be eligible to bid. Companies engaged in specified end-use, including companies with coal linkage or pending application for linkage, will also be eligible to bid for one of the 42 producing mines if they have already invested 80% of the cost of the end-use plant. Even companies with plants based on imported coal would be eligible to bid for a block. The government could also allot any block out of the 204 to a company that has been awarded a power project based on competitive tariff bid on the power ministry's recommendations.
The ministry is looking at inviting requests for proposals from prospective bidders on December 22 and inviting bids by February 3. Bids will be in two stages - technical and financial. The first phase of auction bidding for the coal blocks will take place on February 11, 2015. The reserve price will be announced by late December and coal blocks could be awarded by March 16.
It has also been stated that all the penalty levied should be paid by cancelled block allottees before bidding and the second set of the coal block allocations will take place as per Centre's dispensation. The exercise of auction of the coal blocks was necessitated after the Supreme Court in September cancelled allocation of 204 blocks.
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