Coal auction to start on Feb 11; draft guidelines issued

In the first lot 74 blocks will be auctioned, but the number of mines a company can bid will be capped to avoid monopoly

The auction of first lot of coal blocks, whose allotment was cancelled by the Supreme Court, will start on February 11 and mines will be allotted only to specified end-users, government said on Wednesday.

The government will also ensure that power tariffs will not increase after the auction coal blocks, whose allocation were cancelled by the apex court terming the allotment of 204 mines since 1993 as "arbitrary and illegal".

Coal secretary Anil Swarup in a press conference in New Delhi said in the first lot 74 blocks will be auctioned, but the number of mines a company can bid will be capped to avoid monopoly.

The e-auction of coal blocks will have a two-stage tender process of technical and financial bids, according to the draft rules framed to operationalise the provisions of Ordinance brought for bidding of mines said.

The e-auction of coal blocks had got the approval from President Pranab Mukherjee, who promulgated an Ordinance in the backdrop of Supreme Court order quashing 204 coal blocks to companies since 1993.

The Centre has already appointed joint secretary, coal, Vivek Bhardwaj as the Nominated Authority.

A company engaged in specified end-use, including a firm having a coal linkage whose application is pending shall be eligible to bid for any schedule II mine provided it has made an expenditure of 80 per cent of the total project cost of specified end use plant, according to the draft rules.

A company engaged in specified end-use shall be eligible to bid for any Schedule III mine provided it has made an expenditure of 60 per cent of the total project cost of specified end use plant.

Schedule II coal mines means the 42 blocks out of 204 cancelled ones and Schedule III coal mines refer to 32 coal mines.

The draft rules say that the Centre may also allot any Schedule 1 coal mine (the cancelled 204 blocks) to a company, which has been awarded a power project based on competitive bid for tariff, on recommendation of the power ministry.

The draft rules, which seek stakeholders comments by November 24, say the Centre will issue an order to the Nominated Authority specifying which coal mines are to be auctioned and which are to be allotted to the government companies.