With a new BJP-led Government to be sworn in at the Centre within a week, the sensitive issue of allocation of coal blocks through competitive bidding may be handled with a lot of caution.
Though the Coal Ministry has set the stage for bidding of blocks through competitive bidding for customers requiring them for steel and cement users, sources pointed out that with so much heat having been generated owing to the coal block allocation scam, the new dispensation would naturally be careful about all the pros and cons of giving out blocks through two other means - through Government dispensation and through tariff-based bidding.
In the aftermath of the coal block allocation controversy, the Coal Ministry had finalised three routes to give out dry fuel reserves in future. These were through competitive bidding (for end users like steel and cement), via tariff-based bidding (for power users), and through Government dispensation route (for State-owned entities).
Though the UPA-II dispensation did not give out any blocks (the blocks currently being probed by the CBI are the ones which were given out during the UPA-I regime in 2005) during its entire regime through the bidding process, prior to its exit last week, the Congress-led coalition had announced a nine-member panel, which will identify more blocks, in addition to already selected 54 mines, for sale through competitive bidding.
Official sources said that the BJP-led Government will have to be cautious while dealing with the process of allocating blocks through competitive bidding, and it may not come as a surprise if it even delays it by some months, as it may like to ensure that all the legalities are in place before the blocks are given out.
Similarly the new regime may even read the fine print prepared by the UPA Government for giving out blocks through tariff-based bidding and through Government dispensation before going ahead with these routes.
Meanwhile the nine-member committee, led by Additional Secretary in the Coal Ministry A K Dubey, has been mandated to select blocks from areas explored after 2008. Apart from this, the panel will also examine the status of coal-bed methane blocks and areas relinquished by operators.
Besides, it will also examine the status of preparedness of Coal India for development of already allotted blocks to it and find out scope of re-allocation of blocks of CIl, keeping in view their long-term production commitments.
It is also mandated to identify de-allocated blocks in which there is no legal dispute.
The members of the committee have been drawn from the Coal Ministry, Coal India and its subsidiaries and office of the Coal Controller.
The Coal Ministry has already offered three blocks for auction for captive use for steel, cement and sponge iron companies - two in Jharkhand and one in West Bengal.
It had planned to auction in total 54 coal blocks with a total estimated reserves of about 18 billion tonnes. The Cabinet last year in September had approved the methodology for auctioning coal blocks, providing for upfront and production-linked payments and bench marking of coal sale prices.