States may allocate coal blocks to user industries

The coal ministry has said that provisions are likely to made in the proposed amendments to the Mines and Mineral (Development and Regulation) Act to enable state governments to allocate coal blocks to user industries. This is separate from the auction route for allotment of blocks, which will also be present in the modified legislation.

“We are considering amendments to the MMDR Act, which will be placed before Parliament in the budget session. If coal blocks are available with us, we will surely give it to the states. It can be separately allocated by the government route,” Coal Minister Sriprakash Jaiswal said here today.

Jaiswal, who was speaking on the sidelines of the third Asian Mining Congress, indicated that a dual-track system would be in place, where state governments would be given a certain number of coal blocks, based on availability.

Additionally, an auction route would also be present in which the highest bidder would gain control of the resources in a specific block.

However, he did not give details of the mechanism that would be employed for implementation of this scheme.

Last month, the Union Ministry of Mines had written to state governments, notifying that all coal blocks would be auctioned, on the basis of the proposed MMDR Act, according to which a licence would be granted by the state only to a company selected by the Centre through bidding.

The letter had raised hackles among the user industries, as there was no clarity whether the companies setting up projects would be given priority. Moreover, the utilisation of the auction route could mean that actual users might not be able to procure blocks, while the price of the asset would increase.

The West Bengal government had expressed its apprehension on whether companies setting up projects in the state would be given priority in allocation.