Government may auction coal blocks in Dec-Jan

The government is likely to auction explored coal blocks this December or in January next year, Coal Secretary S.K. Srivastava said here Friday.

Speaking at a CII conference on Mining Leaders' Roundtable, he said that a "letter of comfort" from the environment and forests ministry would be given to the successful bidder.

Srivastava said that there would also be an exit route without any penalty after a period of two years if the requisite clearances failed to materialize.

There have been discussions on lump sum payment or revenue-based models and a framework for the same would be intimated shortly, he added.

Coal India Chairman S. Narsing Rao said the public sector undertaking was all set to meet the deadline for signing fuel supply agreements (FSAs) and it had already entered into fuel supply pacts with about 140 power plants.

Coal india has to sign 173 FSAs for a capacity of 78,000 megawatt. There were issues with only four-five FSAs regarding the cost plus clause and land acquisition, Rao said. The coal secretary confirmed that 143 of the 173 FSAs had been signed so far.

Srivastava also informed that a pilot project was being undertaken by the department of economic affairs in the finance ministry to draft the modalities of bidding documents for selection of mine developers and operator (MDO) for certain Coal India mines. Coal India has already allocated one block for the pilot project.

MDO is a concept wherein a coal block owner contracts entire operations to a third party, which takes the responsibility of land acquisition, resettlement and rehabilitation, mining, developing and operating the particular mine by investing in it and then supplying the coal at a tender-determined price to the power plants of the mine owning state electricity boards.

Srivastava also outlined the details of the Jharia Action Plan formulated to control the raging underground fires. Two independent assessments - one by Central Mine Planning & Design Institute and the other by National Geophysical Research Institute - on the extent of the fire and other related issues were expected in three months. Bharat Coking Coal Limited will also soon seek expression of interest (EoI) on other technology available globally to tackle the fire.