Union Cabinet passes ordinance to auction coal blocks

The Union Cabinet on Monday passed an ordinance to auction the non-operating coal blocks, which were cancelled by the Supreme Court last month. The ordinance has been sent to President Pranab Mukherjee for his final approval.

"In the cabinet meeting, we took up the problem created by the issuance of the coal blocks by screening committee mechanism by previous United Progressive Alliance (UPA) government. The cabinet recommended the promulgation of an ordinance to be submitted to President Mukherjee in order to resolve the pending issues, particularly the situation arising out of the Supreme Court judgement of quashing the coal allocations," Union Finance Minister Arun Jaitley told the media.

"The auction of the coal mines is to be completed within three to four months. A sufficient number of mines will be put up for e-auction," he added.

The cabinet also announced that Coal India's interests will be fully protected and only Indian companies will be allowed to participate in the bidding for the coal blocks.

"Coal India will continue to function as it is. All the requirements of Coal India for the present and the future will be adequately protected. The power, steel and cement sectors were going to suffer because of non-functioning of coal mines whose allocation was cancelled. Now, coal mines will be allocated to state-owned organisations like the NTPC and all State Electricity Boards (SEBs)," Jaitley confirmed.

"Jharkhand, West Bengal, Odisha and Chhattisgarh will benefit from an e-auction of coal mines for actual users of steel, cement and power for private sector firms," Jaitley added.

Coal Minister Piyush Goyal further said, "Only companies incorporated as an Indian company will be allowed to participate in the bidding for coal mines."

In September this year, the apex court in the country had cancelled 214 coal block allocations, giving the owners six months time to wind up. Only four coal blocks had not been cancelled.