Coal block allocation likely in Dec

The allocation of coal blocks through e-auction is likely to take place in December as the Ministry of Coal has already started preparing for the auction on the lines of telecom spectrum.

Ministry officials are in touch with the Department of Communications on setting up modalities for e-auction including criteria for selection of new bidders, transfer of mining infrastructure, determination of a floor price and evaluation of land and other assets associated with the mine.

Initially, 74 coal blocks will be auctioned with power firms getting priority, sources in the ministry told Deccan Herald. The allocation of coal blocks to power plants will not only help banks which have lent over Rs 3 lakh crore to them, but also facilitate power plants having generating capacity worth 40,000 MW in continuing power generation, sources added. 

Most of the 214 coal blocks cancelled by the Supreme Court belonged to power generating firms while a few were allotted to end users — cement and steel plants. This time, however, the government is likely to give priority to power plants as several thermal power plants are facing shortage of fuel.

The Central Electricity Authority in its recent report said, coal stocks at power plants have dipped to their lowest level in 25 years as supplies from Coal India has continuously been falling short of target.

Due to various reasons, coal production has been increasing just 1 to 1.5 per cent per year in the country for the past ten years. In the current fiscal, however, the production will see a jump of 6 per cent. In the next four years, the government has set the target of producing one billion tonne in a year, Power and Coal Minister Piyush Goyal said here recently.

Public sector undertaking Coal India Limited (CIL) is modernising its technology to enhance coal production and mining fuel in newly allotted blocks, he said.  Total fuel stocks at 103 coal-based stations have come down to around 73 lakh tonnes, comprising 65.8 lakh tonnes of indigenous coal and 7.06 lakh tonnes of imported fuel.

CIL, which has monopoly in producing coal in the country, set a target of producing 5,070 lakh tonnes of fuel in this fiscal against the 4,620-lakh tonnes dry fuel in last fiscal. However, the total demand for coal in India is over 720 million tonnes in a year for power, steel and cement plants.