New panel to take up CBM block allotment

A new empowered committee of secretaries (ECS) headed by Cabinet Secretary B K Chaturvedi is expected to make fresh recommendations on the allotment of the 10 coal methane blocks on offer under CBM III at its meeting tomorrow.

However, the Directorate General of Hydrocarbons, in the note it has circulated for the meeting, has maintained its ranking and recommendations that three of the blocks be awarded to a consortium led by Arrow Energy of Australia.

The secretaries of the finance, power, law, petroleum and coal ministries will be the other members of the committee. The recommendations made by the ECS will then have to be approved by the Cabinet Committee on Economic Affairs (CCEA).

The CCEA headed by the prime minister had turned down the recommendations of the earlier ECS on the ground that it consisted of only one secretary, that too of the nodal ministry (petroleum & natural gas), and asked for a fresh evaluation by a new ECS.

Of the 10 blocks, four had been awarded to a consortium headed by Reliance Natural Resources Limited (RNRL), three to a consortium headed by Arrow Energy, two to another consortium headed by the US-based Coalgas Mart, and one to BP Explorations. The DGH had received a total of 54 bids for the blocks.

However, RNRL had objected to the award saying that the bid criteria were changed after the bids were received. The company had contended that the government's three discretionary marks were further divided into sub-criteria after the bids were opened, and these changes put its bids at a disadvantage.

According to it, the government could end up losing around Rs 2,100 crore in revenue by awarding the blocks to the Arrow-led consortium.

Subsequently, the Director General of Hydrocarbons, V K Sibal, admitted that a typographical error had given the Arrow-led consortium 1.0 marks instead of the 0.2 marks actually awarded to it.