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Govt to auction 23 blocks next week, may earn over `2 lakh cr

In the first two tranches of the auction of 29 coal blocks bids, the government has garnered proceeds of Rs 2.09 lakh crore.

Written by Priyadarshi Siddhanta | New Delhi | April 15, 2015 1:22:08 am

The government has finalised a list of 23 coal blocks to be auctioned in the third tranche beginning next week. These ready-to-operate mines are to be offered through forward and reverse bidding mechanism, which, the Centre is expecting, would fetch proceeds of over Rs 2 lakh crore.

The coal ministry had originally planned to auction nearly 16 blocks, but last week it is learnt to have added eight more mines to the auction list. Of the 23 mines, 15 have been earmarked for the power sector while eight are for unregulated sectors like steel, cement and captive power. In the first two tranches of the auction of 29 coal blocks bids, the government has garnered proceeds of Rs 2.09 lakh crore and the entire money would go to the state governments where these mines are located. Allocation of 38 mines to state-run companies is likely to take total proceeds to Rs 3.35 lakh crore over the next 30 years.

“Considering that the first two tranches mobilised huge proceeds, our expectation is that in the third tranche we should see total bids crossing Rs 2 lakh crore,” a source in the coal ministry told The Indian Express. The auction methodology would remain the same as in the earlier tranches. For the power sector mines it would be reverse bidding and forward bidding for the unregulated sectors.


These mines classified as Schedule-III blocks are the ones which are ready-to-operate and successful bidders are expected to face minimum hassles in exploring them, the source said. At the behest of steel and industry ministries, the coal ministry is likely to allow segmentation of utilities in the non-regulated sectors to enable them a level-playing field. The reason is that sectors like steel, cement and sponge iron should not be competing against each other. After the third tranche of auctions is over, the coal ministry is expected to commence allotment of coal blocks to mining PSUs of different states for selling fuel to coal-starved utilities.

The auction process has seen issues like alleged low bids for some blocks and intervention by Delhi and Jabalpur high courts for certain mines. Some bidders have levelled allegations of change of usage of some mines put on the block, a charge denied by the coal ministry. “When the Supreme Court cancelled allocations of 204 mines, it had held their allotment as arbitrary and illegal. Where is the case for change of usage?” another coal ministry official pointed out.

CIL’s fuel linkages likely to be awarded to lowest bidders

New Delhi: The Centre is likely to auction Coal India’s linkages or supply pacts by allowing the discoms of states to invite tariff-based bids and companies which are the lowest bidders would be awarded the linkages for a maximum of 15 years.

Key inputs for the draft paper for the auction methodology being prepared by an inter-ministerial committee (IMC) suggest that allowing discoms (power distribution companies) of the states to invite bids would significantly improve their fiscal health and awarding the linkages to lowest bidders would keep electricity prices in check for consumers.

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