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Govt mulls prior green nod for future coal block auction

Recently, Union power and coal minister Piyush Goyal indicated 'revisiting' the auction policy announcing cancellation of of three coal blocks

Probal Basak  |  Kolkata 

With government's maiden auction of coal blocks failing to attract bidders, the Coal ministry is mulling to put up blocks after securing necessary environmental clearances, going forward.

"The proposal of securing prior approval is under active consideration. As of now, prior environmental clearances seems to be a viable option. Other clearances related to land would have to be taken by the miner after taking possession of the block," a senior official close to the development said.

Recently, union power and coal minister Piyush Goyal indicated "revisiting" the auction policy announcing cancellation of of three coal blocks, which was the first ever bidding for coal block.

Responding to media reports that state-owned power sector lending agency Power Finance Corporation (PFC) may be entrusted with coal block auction in the future, the official said, "There is a proposal of having a nodal agency which would be entrusted with the entire process starting from identification of coal blocks to securing clearances. The role will be like that of PFC which is involved in awarding of ultra mega power projects (UMPP). This could be any of the existing agencies or a new one," said the official.

In the maiden auction coal blocks, Central Mine Planning and Design Institute (CMPDI) was the executing agency which floated the notice inviting application (NIA) for the said blocks in February this year. The United Progressive Alliance (UPA) government had sought applications from companies engaged in production of steel, cement and sponge iron offering three coal blocks - two in Jharkhand and one in West Bengal with total reserves of 500 million tonnes.

Only two companies submitted bids for one block - Andal Babuisol.

For the other two blocks - Jhirki & Jhirki (West) and Tokisud-II - there was no bid at all. However, initially as many as 40 companies had expressed interest in the blocks and bought the bid document.

This has prompted the Coal ministry to overhaul the coal auction policy. Also, government is soon expected to ease the end-use norms for captive mining to allow captive miners to transfer surplus coal from the specified end-use plant to another plant operated by the same company. The coal surplus policy, which government recently said is to be finalised by next month, may allow such diversion of surplus coal by the captive miners. This was mooted as it was found that there were cases where captive mines were ready for production, but the end-use plant was not ready.

"Such changes in the end-use norms will also be accomodated in the new coal auction policy. In fact, this was one of the grey areas for the companies that evinced interest initially in the three blocks. As the talks of relaxing the end-use norms were doing the rounds, there was concern whether miners would be allowed to avail the relaxation in end-use norms midway, if such a policy comes into effect,"said the official.

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First Published: Wed, August 20 2014. 16:44 IST