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States Urged to Expedite MoU with Successful Coal Bidders

The Coal Ministry has written a letter to various state governments – mainly Chhattisgarh, Jharkhand and Odisha, to expedite the process of signing agreements with successful bidders of the recent coal block auction. Sources said, the entire process of e-auctioning and providing coal to the starved power plants are defeated, due to delays from state government.

According to the bidding standards, the companies which won the coal blocks, were to sign MoUs with state governments where the reserves are located. This was to be the first step towards taking possession of the blocks by the successful bidders and then putting them to use for their specific end-use.

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Sources said, around 90 per cent of the coal blocks allocated were for generating power.

The delay in signing agreements results in financial loss to the companies as well as delay in power supply, he added. He also said, this is a cause of concern since it is delaying the further process of auctioning.

However, successful bidders got some relief as fresh environment ministry clearance for mining on the blocks would not be required.

The Ministry of Environment and Forests has decided to transfer clearances obtained by past operators of the mines to the firms that have got the licences.

Out of 67 blocks auctioned in the first round of auctions, a total benefit of Rs 3,35,000 crore is for states and another Rs 69,000 crore will be unlocked by way of tariff benefit to the consumers.

The passing of the Coal Mines Special Provisions Bill, 2015 in Parliament allows the government to continue auctioning coal blocks to private companies. Sources indicated that around 16 block will be put under hammer during second round of auctioning, but timeline is not known.

Anil Swarup, Coal Secretary earlier said, “204 blocks lined up to be allotted by March, 2016 in a transparent manner with a peak capacity of 800-900 million tonne, 500 million tonne of coal would be produced by 2020 to meet the 1.5 billion-tonne coal production target.”


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