In a bid to fast track work in the thermal power generation sector, Union Minister for Power Sushilkumar Shinde has pulled up companies for sitting on coal blocks allocated to them earlier to fuel power plants.
Threatening stiff action against companies that do not start work on captive coal mines within two years of the allotment, Shinde said: "Your coal block might be taken back by the government." He was speaking at a power sector event organised by the Indian Chamber of Commerce (ICC).
He also added that the captive mine blocks allocated to the power generator NTPC Ltd were "not running behind schedule". The international benchmark for beginning production from such coal mines is between seven and eight years.
Competitive bidding for coal allocation
The government has announced that companies would be asked to bid for captive coal blocks by the end of this financial year instead of the current practice of they being allotted blocks by an inter-ministerial committee.
"The policy for competitive bidding of coal blocks will begin within the next three-four months, that is by March 2010," coal minister Sri Prakash Jaiswal said. The move is aimed at inducing greater transparency in the coal allocation process and avoiding delays in development of the mines by weeding out non-serious players from the system.
At present, a screening committee under the coal ministry approves allotment of coal blocks for captive use to public and private companies, he said.
"Competitive bidding will address the issue of non-serious players being awarded blocks," he said.
1957, which governs the process of exploration, mining and allotment of coal and lignite blocks. A Bill in this regard is likely to be introduced in the current session of the parliament.