Govt to open 5 new coal blocks for pvt players

The state government has decided to open up new coal blocks in the Singareni Collieries (SCCL) for private players for captive mining purposes.

According to official sources, the Group of Ministers led by state finance minister K Rosaiah today decided to allot five coal blocks in the Singareni area for privatisation.

Three years ago, the Chandrababu Naidu-led Telugu Desam Party (TDP) government had identified seven coal blocks in SCCL for privatisation and communicated the same to the Union coal ministry.

As Singareni is jointly owned by both the state and the central government, 51:49 respectively, the state government's endorsement for any such move is necessary.But not much had happened since then, even though companies like Rasi Cements and Tata Power had applied for coal blocks for captive mining.

A screening committee constituted by the Union government is authorised to clear the proposals for captive mining. Sources say these proposals are yet to be considered by the screening committee.

The immediate reason behind considering the privatisaion of coal blocks issue by the state government at this juncture is not known. Out of the seven coal blocks, only two blocks are considered to be viable propositions, as the others are said to be located in difficult terrain making them more capital consuming.

The viability question apart, the state government itself was in two minds in giving away these blocks to private players in the light of growing coal needs of the APGenco, the state power utility besides the initial resistance from trade unions.

"A final decision in this regard, however, would largely depend on the response from public as well as the power utility," a senior government official told Business Standard.