But PSUs to get blocks directly, proceeds of allotments to go to States, says Jaitley after Cabinet meet
Mindful of the severe socio-economic fallout of the Supreme Court’s decision to cancel 214 coal blocks, especially in the power, cement and steel sectors, the Government on Monday recommended promulgation of an Ordinance to the President, under which private companies involved in the three sectors would be given captive blocks through e-auction. At the same time, public sector undertakings coming under the jurisdiction of Central or State Governments will be given mines directly.
The entire process of e-auction of captive coal blocks to the private sector entities is expected to be completed within a span of three to four months. The reserve floor price for the blocks which would be put up for e-auction will be recommended by a panel, and the bidding would be sectoral-wise to ensure that competition is between like-minded end-users. The entire process will be conducted in a transparent manner and only Indian companies will be allowed to take part in the e-auction process, the Government said.
Under the Ordinance, the Government has suggested that while Central or State-owned companies like NTPC and State electricity boards will be given blocks directly, private entities which are actual users in power, cement and steel sectors would be given reserves through e-auction.
The promulgation of the Ordinance was recommended by the Union Cabinet in a meeting which took place on Monday evening, and according to Finance Minister Arun Jaitley, who briefed the media about the technicalities, a certain number of mines would be put in a pool and an e-auction would be conducted.
He added that a sufficient number of mines would be put in the pool so that the actual users go back with a mine. The e-auction of coal mines for actual end-users in the coal, steel and power sector, Jaitley said, is round one of the entire process of giving away blocks. During the entire process, all environmental concerns will be taken care of, Jaitley said.
The proceeds from e-auction will go to the State Governments, mainly to Jharkhand, Chhattisgarh, West Bengal and Odisha, as most of these mines are located there.
“Predominantly eastern States would benefit the most. Therefore, there would be financial empowerment of these States. Once the plants (which are stuck due to want of coal blocks, especially in the aforementioned sectors) start working, labourers will get work, bank capital held up with companies which were allotted the mines could also be fruitfully used. Since the focus of the Government is on the manufacturing sector, an expeditious disposal of this process would give a huge impetus to this sector,” the Finance Minister told mediapersons.
Jaitley, however, vehemently denied a suggestion whether the process could be termed as “de-nationalisation” of the coal sector saying, “the original Coal Mines Nationalisation Act remains and will remain and interests of Coal India ltd (CIl) will be fully protected.”
“This (Ordinance) will not in any way impact the structure of CIl. It will continue to function as it is, and all the mining required there, in present and future will be adequately protected. There will be an enabling provision for future where under rules which are framed, commercial users of mines in future could also be decided by the Centre. This will lead to optimum usage of natural resources,” the minister explained.
The entire mess that the UPA had left behind from 2005 onwards over the next four months would be cleaned up, Jaitley said, adding that coal worth $20 billion which was being imported annually would be domestically substituted through this measure.