Cabinet nod for auction of coal linkages to unregulated sector

Aiming to make the process of allocating natural resources more transparent, the cabinet committee on economic affairs (CCEA) on Wednesday approved the awarding of fresh coal linkages for the unregulated sector through auctions.

"Except for the power and fertiliser sectors, non-regulated sectors like steel, aluminium, cement and sponge iron will in future bid in transparent auctions for coal linkages," Power Minister Piyush Goyal told reporters here after a CCEA meeting chaired by Prime Minister Narendra Modi.

Clarifying that the bidding process will only be instituted for fresh linkages, Goyal said: "Existing private party linkages will continue till the expiry of the current FSAs (fuel supply agreements) and they have to bid in auctions after these lapse for getting fresh coal linkages."

"To ensure there is no interruption in supplies, the lapsed FSAs will continue till restart of supplies after auctions," the minister said.

Goyal added that coal linkages for state-run undertakings, however, would continue to be extended, though they would need to bid in auctions to satisfy any extra requirement of coal.

He also said that it has been decided that 25 percent of excess fuel produced by state-run Coal India would be made available for non-regulated sector needs through e-auction.

The Supreme Court had in 2014 cancelled allotment of 204 coal blocks made since 1993 on the grounds that the allocation process was "non-transparent, irregular and arbitrary".