23.2.15

Of Coal Block Auctions....


The government has sold 15 coal blocks so far in the auction that started on February 14, ensuring a windfall of close to Rs.1 lakh crore, including royalties, for states and much more in terms of lower power tariffs. Eighteen operational mines were on offer in the first round of auction that will end on Sunday .
The benefits come in three ways ­ auction proceeds over the life of the mines, royalty and the reduction in power tariff because of reverse auction, where the bidder who quotes the lowest coal price to pass on to the consumer wins, said coal secretary Anil Swarup.
The 15 coal blocks that were auctioned until Thursday fetched Rs.83,662 crore as e-auction proceeds, Rs.12,801 crore in expected royalty and Rs.37,050 crore in tariff reduction, taking the total value to states at Rs.1,33,513 crore, he said. The government expects bidding in the next round, which starts on February 25, to be less fierce since all the 19 mines on offer are non-operational.
Madhya Pradesh tops the list of states in terms of auction proceeds (Rs.39,900 crore), followed by Chhattisgarh (Rs.26,425 crore). Among others, West Bengal will get Rs.13,210 crore and Jharkhand Rs.14,498 crore over the life of mines.
Swarup said the government plans to allocate all the 204 captive coal blocks on which mining permits were cancelled by the Supreme Court last year, citing irregularities in their allotment process.
Meanwhile, state-run Coal India will form special purpose vehicles with coal-rich states and railways to expedite mining projects and evacuation facilities to attain the target of doubling coal production to one billion tonnes in the next five years, chairman S Bhattacharya said. CIL will own a 64% stake in these companies, while state governments will have 10%-12% with the railways holding the rest.
Two CIL subsidiaries -Mahanadi Coalfields and South Eastern Coalfields -are expected to play a pivotal role in attaining the production target by 2020. The coal miner is relying on timely completion of three critical railway lines and timely land acquisition and green clearances.




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