Moving with alacrity to bridge a possible shortfall of coal, the NDA government has formed a committee headed by former Central Vigilance Commissioner Pratyush Sinha to assess the compensation to be paid for taking over coal blocks that were running or ready to produce from next April.
Three days after President signed an ordinance on October 21 to e-auction cancelled blocks, coal ministry formed a panel of Sinha and senior officials — Joint Secretaries and above — from ministries of Coal, Power, Finance and Law, and gave them just over a fortnight to submit the recommendations.
“The Committee shall give its recommendation for 42 coal mines by 10th November 2014,” says the October 24 ministry order gearing up to prepare the modalities of the proposed e-auction.
The Valuation Committee would assess the value to be paid for acquiring these blocks — 37 of which are producing and five are ready to produce from April. Unlike others, their cancellation is to take effect from April 2015.
The Supreme Court’s cancellation of block licences last month on grounds that they were allotted in an illegal and arbitrary manner could cause coal supply disruptions as the 37 mines produced 38.14 million tonnes in 2013-14 while future five are expected to chip in another 5.85 million tonnes.
However, government has decided to revert half of these 42 blocks to government entities that were original allottees while putting up remaining 21 in the first phase of e-auction with bidding open to companies engaged in specified end uses of power, cement and steel.
The valuation and compensation to prior allottees would be limited to land and mine infrastructure with other liabilities to remain with them. “The Committee shall also carry out the assessment of the liabilities associated with the operations of the mine,” says the order.