August 11, 2009 2:20:23 am
Bowing to intense pressure from the states,the Coal Ministry is understood to have endorsed their demand for value-addition of captive coal blocks falling within their respective boundaries.
In its proposed process of auctioning blocks through competitive bidding,the ministry has proposed to insert a provision in the modalities of the proposed auctioning process for competitive bidding for blocks whereby preference would be given to a company that proposes to set up the end-use industry in the state in which the coal block is located. The provision would be applicable if its bid is within 5 per cent of the highest bid and the company is willing to match the highest bid for that block. Coal minister Sriprakash Jaiswal today conveyed his ministrys agreement in this connection to the ministers and senior offficials from more than 15 coal and lignite bearing states. This,he said,should adequately promote the interests of the coal rich states.
The ministry was initially reluctant to accept the demand of the states on value-addition within their territorial domain arguing that coal was a very precious national resource and the geological process of evolution determined its occurrence. Hence,its usage could not be entirely restricted to its area of origin.
Seeking to allay the apprehensions of the states that their role would be diluted once the proposed auction system was formally introduced,the minister said as per the current provisions of the Mines and Minerals (Development and Regulation) Act 1957,the development and regulation of coal reserves vested with the Centre. Since the Centre continues to have the deciding say on granting of prospecting licence and mining leases,the introduction of the proposed auctioning system would in no way alter this position.
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