Govt seeks Parliament nod to auction coal blocks for captive use

The government on Friday proposed to auction coal blocks for captive use by consuming industries like power and cement, a move intended to make the allotment process more transparent and expeditious.

The government also suggested setting up a coal regulator to primarily tackle issues such as coal pricing. Both the proposals are awaiting Parliament clearance.

"The government proposes to introduce competitive bidding process for allocation of coal block for captive mining to ensure greater transparency and increased participation in production of coal from these blocks," Finance Minister Pranab Mukherjee said while presenting the Union Budget 2010-11.

The Union Cabinet had last month approved a revised bill to amend some of the clauses of the Mines and Minerals Development and Regulation Act, 1957, (MMDR Act) to pave the way for competitive bidding of coal blocks for captive use.

The Bill has been pending for over two years now since it was introduced in Parliament in 2008 and later referred to the Standing Committee on Coal.

Currently, coal blocks for captive use are granted through a screening committee, which examines the short -term and long-term requirements of the consuming firms.

State-run firms, however, can get coal blocks for captive use through both auctioning as well as the existing route.