Panel on fixing coal-auction floor price to meet Tuesday

An inter-ministerial committee (IMC) of secretaries is expected to meet here Tuesday to work out a methodology for setting reserve prices for auctioning coal blocks cancelled recently by the Supreme Court.

The IMC comprises the secretaries of finance, power, steel, law, mines, petroleum, and the department of industrial policy and promotion (DIPP) besides coal.

The government had in 2012 formed an IMC for formulating the methodology of fixing the floor price for auction of coal blocks. It proposed allotting coal blocks only to government companies or to power plants that have agreements to sell electricity based on tariff-based bidding, so as to ensure that the benefit of cheaper domestic coal is passed on to consumers.

A source told IANS that in view of the apex court cancelling allocation of 204 coal blocks, there would be many power plants linked to these mines, or power plants, without coal linkage which would either have cost-plus power purchase agreements where tariff is fixed by the regulator or agreements to sell electricity based on bid tariff.

Tuesday's meeting is expected to take into account the fallout of the Supreme Court order on existing power plants, and it is being felt that the methodology decided previously needs a relook and a new one needs to be adopted, the source added.

Of the 204 coal blocks cancelled, 37 are running coal mines and another five are ready to commence production by April.

The government brought in an ordinance last month to revert half the 42 mines to the government entities that were the original allottees.

The remaining 21 will be put on e-auction in the first phase of bidding that will be open for end-users in power, cement and steel sectors.