Determined to start coal blocks' auction this fiscal, the government has decided to set aside reserves for end-users like power, cement and steel companies, which will be allocated blocks through competitive bidding, after meeting the needs of state-run Coal India (CIL).
"The meeting was successful. Based on the reaction of the stakeholders, we will shortly take the call on firming up the modality of competitive bidding. We will surely introduce the auctioning within current fiscal," Coal Minister Sriprakash Jaiswal told reporters here after a meeting with stakeholders on introduction of competitive bidding of coal blocks.
The Coal Ministry had floated a discussion paper in April seeking comments from stakeholders to finalise guidelines for allocation of coal and lignite blocks under the competitive bidding route and laid out four options from which one would be used while allocating blocks through auctions.
Talking to PTI, a few stakeholders said that majority was in favour of upfront payment, which mandates the bidder to commence mandatory work programme immediately after signing the agreement with the ministry and pay the amount within five years of signing the contract.
Meanwhile, Jaiswal has hinted that the number of blocks to be offered through competitive bidding would be limited since the priority of the government would still be CIL.
"We will give maximum blocks to CIL and try to first meet its appetite and then give to others. We will give blocks to States and private firms; but the maximum will go to CIL,"he said.
He declined to give the number of coal blocks identified by his ministry to be offered through competitive bidding when it takes off. End-users of coal like cement, steel and power companies would be eligible to take part in the competitive bidding process.
A source in the ministry, however, said the Coal Ministry was planning to earmark blocks for sectors such as power, cement and steel, which use coal as raw material, separately to avoid the prospects of allottees losing interest in developing the mines.
The Coal Ministry wanted to introduce e-auctioning of the coal blocks to bring in more transparency in allocation.
