Government brings transparency in coal sector; may auction mines through international bidding route

New Delhi, Aug 12: A move that may attract more private investments and bring in greater transparency in the coal sector, the government is likely to auction mines through international competitive bidding route currently adopted for awarding ultra mega power projects. At present, the Ministry of Power awards ultra mega power projects (UMPPs) of 4,000 MW capacity each through international competitive bidding process.

Power Finance Corporation is the nodal agency for these UMPPs. It is responsible for acquiring land in cooperation with the state government and receiving all the environment and forest clearances after which the tenders are invited from the bidders. A Power Ministry official said the government may adopt the same model for allocation of coal blocks in the future.

However, he added that the proposal is at a very nascent stage and the modalities are yet to be worked out. According to sources, Power Finance Corporation, Rural Electrification Corporation or Coal India may be the nodal agency for the coal block auctions. The government is of the view that the power project developers in the past have struggled for acquiring land, receiving water supplies, environment and forests clearances etc.

The proposal is also aimed at bringing in more transparency in awarding coal blocks. Meanwhile, the government has cancelled auction of three coal blocks — Jhirki and Jhirki (West) mine, Andal Babuisol and Tokisud-II — as certain clearances need to be revisited. Of the three blocks, which have total reserves of 500 million tonnes, two are in Jharkhand and one is in West Bengal.