Coal auction: Ministry hopeful of resolving issues in 15 days

The Coal Ministry today said it hopes to resolve differences within 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 here today at a conference here.

Stating that an inter-ministerial group is deliberating on the issues, he added "hopefully within a period of 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 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 which are to be involved. We are to still arrive at a final view but few of the ministries have said that blocks have to be given with clearances," he said, adding that this "requires lot of deliberations".

The IMG, which consists of various ministries including Steel, Coal, Power, Industries, Petroleum and Planning Commission, has so far met 3-4 times, he added.
While environment clearance is given by Ministry of Environment and Forests (MoEF), forest clearance are provided by respective state governments.

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

Amid alleged irregularities in allocating coal blocks to various firms for their captive consumption in the past, the government had decided to allocate such blocks through 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 Discounted Cash Flow (DCF) method for valuation of the blocks.

The government auditor CAG in its recent report had said government could 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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