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Coal blocks now only for ‘capable’ companies

Discarding its age-old system of allocating coal blocks to steel,power and cement utilities through the screening committee route,the coal ministry has resolved to henceforth...

Discarding its age-old system of allocating coal blocks to steel,power and cement utilities through the screening committee route,the coal ministry has resolved to henceforth allocate all blocks through the competitive bidding process.

“We have decided to allocate fresh blocks only through the competitive bidding process,primarily because we only want those companies who have the capability to develop blocks to get them. Our experience has been that numerous blocks were given to those who did not have the required capital-intensive technology to extract coal,” coal minister Sriprakash Jaiswal told The Indian Express.

Interestingly,a Group of Ministers,headed by then home minister Shivraj Patil had approved the proposal way back in 2007. The Union Cabinet,however,has only recently approved it. The coal ministry had favoured introduction of competitive bidding as a measure for ensuring fairness in allocation of coal blocks to stakeholders. The screening committee was considered to be a lengthy process and there was an express need to avoid delays to expedite allocations in a transparent manner.

Therefore,till June last year,the ministry had allocated 201 coal blocks with geological reserves of about 45 billion tonnes to the government as well as private sector companies for both captive and commercial mining.

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The ministry is also under pressure from Coal India Limited (CIL),which has been demanding the allocation of 138 blocks to it for meeting its production plans and to increase availability of the fuel beyond the 12th Plan period. CIL chairman Partha Bhattacharyya has already voiced his concern on deallocating further blocks from the company’s fold and had instead argued that CIL would need more blocks to ensure uninterrupted coal supply.

First published on: 08-04-2010 at 01:43 IST
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