Millennium Post

Coal Ministry hopes to resolve auction problems in 15 days

The Coal Ministry said on Monday that it hopes to resolve differences within the next 15 days with ministries like Environment and Power on the proposed bidding norms for auctioning of captive coal blocks.

The unresolved issues include whether to provide an ‘in principle’ environment clearance to the blocks on offer, arriving at a benchmark floor price and offering discounted prices to sectors like power, Coal Secretary S K Srivastava said at a conference here on Monday.

Stating that an inter-ministerial group (IMG) is deliberating on the issues, he added, ‘Hopefully within a period of the next 10-15 days, we will be able to arrive at some common position on these issues and then come up with a final view (on bidding norms for coal blocks).’

The coal secretary further said that some ministries are in favour of putting up the blocks for auction with certain clearances like environment but it may not be feasible due to procedural reasons.

‘We are in touch with the Ministry of Environment on whether there can be a thing like conceptually providing in-principle approval, which I feel may not be possible considering the processes that are to be involved. We are still to arrive at a final view but a few of the ministries have said that blocks have to be given with clearances,’ he said, adding that this ‘requires a lot of deliberations’.

The inter-ministerial group, which consists of various ministries including Steel, Coal, Power, Industries and Petroleum as well as the Planning Commission, has so far met three-four times, he added.

While environment clearance is given by the Ministry of Environment and Forests (MoEF), forest clearance is provided by the respective state governments.

There has not been any provision so far for according an in principle environment clearance while approving a project, a senior government official said on condition of anonymity.

Amidst alleged irregularities in allocation of coal blocks to various firms for their captive consumption in the past, the government had decided to allocate such blocks through the auction route only.

Later it identified 54 such blocks for auction and asked Crisil to provide a report on the methodology to determine the reserve price for bidding of the blocks.

Crisil, which submitted its report last month, has reportedly suggested preparing a robust feasibility report of all the 54 blocks and using the discounted cash flow (DCF) method for valuation of the blocks.

The Comptroller and Auditor General of India (CAG), the government’s auditor, said in its recent report that the government might have accrued financial gains of Rs 1.86 lakh crore had it auctioned the 57 captive coal blocks that were allocated to private firms between 2004 and 2009.
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