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Centre forms panel to assess compensation for coal blocks

Centre forms panel to assess compensation for coal blocks
Days after promulgating an ordinance to e-auction Supreme Court-cancelled coal blocks, the government has formed a committee headed by former CVC Pratyush Sinha to assess compensation to be paid for taking over running or ready to produce mines.

The panel, which will also comprise officials of ministries of coal, power, finance and law, will submit its recommendations by 10 November, sources with direct knowledge of the development said.

The Supreme Court had on 24 September cancelled allocation of 204 coal blocks to various companies between 1993 and 2009. Out of these, 37 are running coal mines and another five are ready to produce by April.

Unlike others, their cancellation is to take effect from April 2015. The sources said the committee has been asked to value assets of each of these 42 coal blocks for mining infrastructure such as tangible assets used for coal mining operations, fixed installations and land.

‘The committee shall recommend the value of the assets to be paid for acquisition,’ one of the sources said.

Also, the panel would carry out assessment of the liabilities associated with the operations of the mine. The committee has been authorised to engage experts/ consultants for valuation of running coal mines.

Sources said the government wants to clear all roadblocks and meet conditions precedent for the new owner of the mines, which will be decided through an e-auction, to takeover operations of the 42 mines from April next year. The 37 running mines in 2013-14 produced about 38.14 million tonnes of coal while the five others are likely to chip in with another 5.85 million tonnes.

Keen to avoid any supply disruption, the government on 21 October promulgated an ordinance to revert half of these 42 mines to the government entities that were original allottees.

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

If the winner of these 21 mines is different than the one already operating, the existing owner will be paid compensation and operations handed over to the winner, they said.
PTI

PTI

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