Government offers 17 coal blocks to PSUs

The government has offered 17 coal blocks with estimated reserves of 8,500 million tonnes to public sector undertakings (PSUs), initiating the process of allocation of coal blocks under the amended provisions of MMDR Act.

In the first round, the government proposes to allocate coal blocks to government-owned companies/undertakings (both central and state) for specific end use, viz, power and coal mining.

Accordingly, the government has decided to allocate 14 coal blocks for power sector and 3 coal blocks for mining to different central and state undertakings.

The 14 coal blocks being offered to power producers include the Mand Raigarh coal fields in the Jilga Barpali block having estimated reserves of 545.70 million tonnes of coal; the Brahmani coal mine in the Kalyanpur-Badalpara block (102.30 million tonnes); the Singrauli coal fields in the Gand Bahera-Ujheni block (532.00 million tones), the Talcher coal field in the Kudanali-Laburi block (396.10 million tonnes); the Talcher coal field in Sarapal-Nuapara block (701.10 million tonnes); Talcher coal field in Tentuloi block (1234.30 million tonnes); Rajmahal coal field in Pachwara South block (279.00 million tonnes); Kamptee coal field in Mahajanvadi block (340.00 million tonnes); Talcher coal field in Chandrabila block (550.00 million tonnes); Mand Raigarh coal field in Baisi block (150.00 million tonnes); Birbhum coal field in Deocha Pachami and Dewanganj Harinsingha blocks (2,064.20 million tonnes); Mand Raigarh coal field in Banai block (628.70 million tonnes); Mand Raigarh coal field in Bhalumuda block (550.00 million tonnes) and the Hasdeo Arand coal field in Kente Extn block (200.00 million tonnes).

The three coal blocks being offered for mining include the Talcher coal field in the Brahmani block with estimated reserves of 58.90 million tonnes; Auranga coal fields in the Gowa block (51.40 million tonnes) and the Korba coal fields in the Kerwa block with estimated reserves of 112.90 million tonnes.

''The applications received will be evaluated on the prescribed criteria in consultation with the respective state government and central ministries,'' read the ministry's notice inviting the applications.

The ministry had last week published the selection criteria based on a 30-point system assigning the highest nine points for ''preparedness of the plant''. This includes evaluating whether in-principle approval has been obtained for the project, land acquisition, water allocation and approval of terms of reference of the project by the environment ministry.

The next evaluation criteria is ''demand and supply gap of the state'' during the 12th and the 13th Plan periods. This implies that companies setting up projects in states with higher coal shortage are more likely to be allocated reserves. Nine points have been assigned for this criteria.

Further, six points have been assigned for the criteria ''company's financials''.

This includes four points for net worth and two points for turnover of the company.

Three points have been assigned for the progress of development of blocks allotted in the past to the applicant company. The last three points have been kept for location of the plant – pithead plant or those located within a distance of 100 km from the block will be given priority.

The central government will identify coal-bearing areas and earmark these for specified end-use or mining.

This will be followed by fixing a reserve price for each block. Applications will be invited from central and state-owned companies.

The government did not provide details of the reserve prices for the 17 blocks set to go under the hammer in its notification. Private consultant CRISIL, appointed earlier for determining the methodology for fixing the reserve price and floor price, had recommended linking valuation of coal reserves to international prices in its report on coal block auctioning.

In case of mining companies, mined coal will be further distributed to end-use projects through long-term agreements on the lines of coal linkages.

In case of companies seeking blocks for end-use projects, the mined coal will have to be mandatorily used for captive purposes. Overall, the government had planned to allocate 58 blocks through competitive bidding. Applications would soon be invited for the rest 41 blocks by the ministry.

The government had earlier allotted coal blocks to companies through a screening committee, which according to the Comptroller and Auditor General of India led to a loss of nearly 1.86 lakh crore to the exchequer.