JOIN USThe Centre on Monday decided to promulgate an Ordinance to facilitate the e-auction of coal blocks for private companies for captive use, and allot mines directly to state and Central PSUs.
The Union Cabinet chaired by Prime Minister Narendra Modi took this decision following the Supreme Court quashing allocation of 214 coal blocks to various companies since 1993.
“The Cabinet has recommended promulgation of an Ordinance to the President in order to resolve the pending issues particularly the situation arising out of the Supreme Court judgment quashing the allocation of the coal blocks,” Finance Minister Arun Jaitley told reporters after the meeting.
State sector requirements, including those of the Central and state governments, would be met and coal mines would be allocated directly by the Ministry of Coal to PSUs like the National Thermal Power Corporation, Karnataka Power Corporation or any other state electricity boards.
“As far as the private sector is concerned, the actual users of coal in the cement, steel and power sectors who apply for a certain number of coal mines, will be put in the pool and there would be an e-auction. A sufficient and adequate number of mines would be put so that actual users go back with the mines,” he said.
The auction process completed in “three to four months” with proceeds going entirely to the state governments where the mines are located, he said.
The biggest beneficiaries would be the eastern states like Jharkhand, Odisha, West Bengal and Chhattisgarh.
States like Madhya Pradesh, Maharashtra and Andhra Pradesh would also benefit from the move.
Aiming to protect the state-run and private end user firms, who have lost coal blocks due to the Supreme Court judgment, the Centre decided to bring an Ordinance to allow it to allocate fuel to these firms.
As per the Coal Mining Nationalisation (CMN) Act, only the Central government or its entities are allowed to mining.
Sources said successful bidders in the fresh auction of coal blocks along with the land and plant standing on it would be liable to pay the earlier allottees the cost of the land and the plant along with 12 per cent annual interest on the amount that was originally invested for purchasing the land and setting up plant.
All allottees whose blocks were cancelled by the apex court would be eligible to participate in the fresh auction barring those convicted in coal related cases, said sources.