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Two rounds of auctioning of coal blocks to private companies would see power rates coming down by Rs 96,971 crore. These rates cuts would be offered by companies bagging coal blocks reserved for the power sector. The likely proceeds from the auctions crossed Rs 2.07 lakh crore on Monday.
Power Minister Piyush Goyal tweeted the revenue was “far in excess of CAG (Comptroller and Auditor General of India) loss estimate of Rs 1.86 lakh crore". The amount would go to state governments as e-auction, royalty, and upfront payment proceeds. Besides, power fuel cost would reduce by Rs 96,971 crore resulting in savings for power consumers. He said lower cost of power would benefit coal bearing states such as Odisha, West Bengal, Jhakhand, Chhattisgarh, Madhya Pradesh and Maharashtra.
The second phase of e-auction of 13 coal mines to sector majors increased the revenue to mineral-rich states for 30 years to Rs 2.07 lakh crore from earlier Rs 1.35 lakh crore, collected in the first phase. While the first phase included 18 producing mines, the second phase had 13 mines from schedule III comprising mines ready to start production.
The Union government had offered some 11 blocks with power generation, as end-use to private companies in the first and the third round of auctioning. “The bidders will give Rs 96,971 crore in rate concessions. The figure of Rs 37,050 crore given earlier for the first round has undergone a change. Besides, adding to it is the reverse auction in blocks in the third schedule," Anil Swarup, coal secretary told Business Standard.
Another 42 coal blocks out of 43 allotted to government companies have the power sector as their end use. However, since there was no bidding in allotment of these blocks, there is no apparent cut in power tariff but a lower coal cost could help the companies in keeping their fuel component of power rate low, said Swarup.
Bidding for blocks reserved for power sector was on reverse auction basis — whichever company bid the lowest price below the ceiling price announced by the government emerged the winner. This lower cost of coal is required to be passed on to companies in lower rate. Owing to stiff competition, the reserve price which was to act as a ceiling was fixed as zero by the government. For every Rs 100 fall in bid amount, power rate falls by six paise.
On Monday's auction, Monnet Power bagged Utkal C mine for a negative Rs 770 a tonne. The block is for power generation and was put for reverse auction. The bidding, however, turned into forward auction. Bidding for Lohari block was still going on.
The government is re-allocating the cancelled coal blocks by the Supreme Court through an e-auction process. The first phase, which ran from February 14 to 22, saw auctioning of 18 blocks earning the respective state governments cumulative revenue of Rs 1.35 lakh crore.
Finalisation of the winning bid has, however, been kept pending for three blocks. Jindal Power, BS Ispat and Balco had emerged as winners in these blocks. A decision on the three blocks is expected in a week's time.
Power Minister Piyush Goyal tweeted the revenue was “far in excess of CAG (Comptroller and Auditor General of India) loss estimate of Rs 1.86 lakh crore". The amount would go to state governments as e-auction, royalty, and upfront payment proceeds. Besides, power fuel cost would reduce by Rs 96,971 crore resulting in savings for power consumers. He said lower cost of power would benefit coal bearing states such as Odisha, West Bengal, Jhakhand, Chhattisgarh, Madhya Pradesh and Maharashtra.
The second phase of e-auction of 13 coal mines to sector majors increased the revenue to mineral-rich states for 30 years to Rs 2.07 lakh crore from earlier Rs 1.35 lakh crore, collected in the first phase. While the first phase included 18 producing mines, the second phase had 13 mines from schedule III comprising mines ready to start production.
The Union government had offered some 11 blocks with power generation, as end-use to private companies in the first and the third round of auctioning. “The bidders will give Rs 96,971 crore in rate concessions. The figure of Rs 37,050 crore given earlier for the first round has undergone a change. Besides, adding to it is the reverse auction in blocks in the third schedule," Anil Swarup, coal secretary told Business Standard.
Another 42 coal blocks out of 43 allotted to government companies have the power sector as their end use. However, since there was no bidding in allotment of these blocks, there is no apparent cut in power tariff but a lower coal cost could help the companies in keeping their fuel component of power rate low, said Swarup.
Bidding for blocks reserved for power sector was on reverse auction basis — whichever company bid the lowest price below the ceiling price announced by the government emerged the winner. This lower cost of coal is required to be passed on to companies in lower rate. Owing to stiff competition, the reserve price which was to act as a ceiling was fixed as zero by the government. For every Rs 100 fall in bid amount, power rate falls by six paise.
On Monday's auction, Monnet Power bagged Utkal C mine for a negative Rs 770 a tonne. The block is for power generation and was put for reverse auction. The bidding, however, turned into forward auction. Bidding for Lohari block was still going on.
The government is re-allocating the cancelled coal blocks by the Supreme Court through an e-auction process. The first phase, which ran from February 14 to 22, saw auctioning of 18 blocks earning the respective state governments cumulative revenue of Rs 1.35 lakh crore.
Finalisation of the winning bid has, however, been kept pending for three blocks. Jindal Power, BS Ispat and Balco had emerged as winners in these blocks. A decision on the three blocks is expected in a week's time.
