Rejecting Gujarat government's demand to stop the proposed auctioning of lignite blocks for captive use, the Centre has said the plan when implemented, would expedite such allotments and make the process transparent.
In response to a letter by Gujarat Chief Minister Narendra Modi, Coal Minister Sriprakash Jaiswal said the proposed auctioning system would bring in transparency in the and make the allocation process objective.
"I have had the matter examined in the ministry and wish to inform you that in the amendment bill that seeks to introduce allocation of coal lignite blocks through auction for the purpose of captive mining, there is no provision to keep the lignite blocks out of the purview of competitive bidding.
"The competitive bidding is proposed in order to ensure a more transparent, fair and objective system of allocation of coal and lignite blocks," Jaiswal wrote in a letter dated February 25, 2010, a copy of which was also forwarded to the Prime Minister's Office (PMO).
The Gujarat CM, in a letter to the PMO last year expressed fear that the proposed auctioning route would make the dry fuel expensive, and thus add to the fiscal burden of the state government, which provides subsidised electricity to farmers.
The Coal Ministry also declined a proposal from Gujarat to give special dispensation to the state in allotting lignite blocks.
"To restrict the use of these resources only within the state of their occurrence may not be in the overall interest of the national economy and integration. If Gujarat is allowed a special dispensation, then the other states where coal, lignite and other minerals occur would also demand a similar dispensation.
"This would deprive rest of the states that do not have coal, lignite and other mineral deposits from access to such minerals. This would also prevent optimal use of scarce national resources and may lead to unbalanced development of the national economy," Jaiswal said.
Moreover, the minister said, the state PSUs would be given coal and lignite blocks for captive use from the existing screening committee route.
"The process of allocation of coal/lignite blocks under the government company dispensation as well as to power projects that are awarded on the basis of tariff-based bidding would continue as these are kept outside the purview of the Amendment bill," Jaiswal further wrote.
