Round 4: Eight coal blocks to go under hammer from Jan 18

Last 3 rounds generated proceeds worth Rs 3 lakh cr.

By: ENS Economic Bureau | New Delhi | Published: November 20, 2015 12:58 am

The coal ministry on Thursday announced that eight coal blocks would go under the hammer in the fourth round of auctions for the non-regulated sectors between January 18 and 22 next year.

Briefing reporters on the impending auctions, coal secretary Anil Swarup said his ministry has decided to electronically bid out eight Schedule III coal mines (ready-to- operate blocks) for non-regulated sectors like iron and steel, cement and captive power plants. “The e-auction for these mines will be held from January 18 to January 22, 2016,” he said. The last three rounds of auction generated proceeds of more than Rs 3 lakh crore, to be realised by the states spread over the next 30 years which host the mines auctioned in the previous three tranches.

These blocks together have geological reserves totaling 1,143.42 million tonne (MT) and their peak rated capacity stands at 12.86 MT. The coal blocks to be bid out are — Brahmapuri and Suliyari in Madhya Pradesh, Bundu and Gondulpura in Jharkhand, Gondkhari and Khappa & Extn in Maharashtra and Jaganathpur A and Jaganathpur B in West Bengal.

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In reply to a query the secretary refused to project possible realisation of revenues from the fourth round of auctions and instead said the same would depend on response from bidders. The sale of tender would begin from December 31 and the vesting orders would be issued to the successful bidders by the nominated authority of the ministry by March 10.

Of the 34 blocks had been allocated or auctioned, barring one, which is under litigation, seven of mines have registered over 5 MT output and the rest are expected to begin production “in next two to three months”, he said. All issues including clearances, stamp duty, handing over of assets etc were “fortunately resolved on the intervention of Prime Minister who himself reviewed the projects”, Swarup told reporters. Mining leases have been granted in 29 cases and remaining four will also get it soon, he added.

Coal output has crossed 300 MT about three days ago and the fuel’s production is growing at around 9 per cent and offtake too grew by 9.8 per cent lessening inventory around the pitheads, he said. Increased output has lessened imports by 4.56 per cent as compared to the previous year. Due to the increase, coal-starved power utilities now have “an inventory of about 19 days” and imports have decreased in the past four months, he said in reply to a query. Reminding that his ministry has decided to ensure supply of quality fuel by supplying crushed coal from January 1 next year, Swarup said state-run Coal India is also progressing well to set up 15 washeries to supply clean coal.

He re-affirmed the government’s decision to rationalise coal linkages and pointed out that a report in this connection prepared by consultancy firm KPMG has been received by his ministry. In this regard, rationalisation has been done so far for 19 thermal coal plants resulting in annual saving of Rs 1,423 crore in freight cost.

Centre is also considering whether linkages of inefficient plants could be diverted to efficient ones to help increase generation of coal-fired electricity, Swarup said and reasoned that this would be a part of the UDAY package, announced by the government to revive the discoms.

“…instead of allocating linkage to a plant, the allocation gets to the state and in the same manner in case of bidding they will seek tariff on that linkage so as to bring down the cost of power for discoms which will help them in the package,” the coal secretary said.

He said the government has also identified a few blocks to be allocated under UDAY to states which would prepare the package so that those blocks could again be auctioned seeking a lower tariff adding, it is aimed at reducing power cost.

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