Assocham for coal preference to operational end use plants

Says auctions should be opened for others only after coal for these projects is secured

Industry body Assocham today suggested the government give preference in mines auction to captive block allocatees whose end use plants were operational at the time Supreme Court quashed allocations of mines.

The Supreme Court had last month quashed allocation of 214 out of 218 coal blocks which were alloted to various companies since 1993.

"Assocham has suggested the government to give preference in allocation of cancelled coal blocks to captive block allocatees who have an operational or soon to be operational end-use-project," the industry body said in a statement.

The auctions should be opened for others only after coal for these projects is secured, it said.

In a note submitted to the Prime Minister Office (PMO), the Chamber stated that coal blocks already allotted for end use steel projects should be auctioned only for steel projects and similarly coal block allotted for end use power projects be auctioned only for power projects, it said.

The reserve price and upfront payment should be based on actual mineable reserves only (as assessed by CMPDIL/MECL etc) and not on the basis of geological reserves, it said.

Clearances accorded to the existing coal blocks should automatically get transferred to the new allocatees. Obtaining these clearances again will lead to considerable delays in commencement of production from mines and adversely affect the end use projects, it said.

"Bidding for end use power as well steel projects should be on the basis of upfront payment fixed by MoC (Ministry of Coal) and extractable reserve linked payment quoted by the bidder in Rupee/tonne," it said.

It further said that auction process should accord Right of First Refusal (RoFR) to the existing allocatees of the coal blocks who have end use plants either operational or soon to be operational or to the allocatees which have taken substantial effective steps to set up end use plants.