The Government is looking at generating around Rs2 lakh crore in terms of revenue through auction of 34 coal blocks, which is almost complete with just two mines left for bidding. According to sources privy to the development, even if the Coal Mines (Special Provisions (Bill) 2015 fails to pass muster in Rajya Sabha, the legislation has served its main purpose of ensuring that all the 19 under production blocks are auctioned out before the March 31 deadline which had been set by the Supreme Court.
If the Government is able to generate the aforesaid amount, then it would also surpass the CAG's estimate of Rs1.86 lakh crore loss suffered by the exchequer on account of allocation of blocks without auction during the UPA regime.
According to information available with The Pioneer, the Coal Ministry had put up 25 mines on auction under Schedule - II (consisting of reserves which are under production), out of which 19 were successfully bid out. Similarly under Schedule - III (consisting of mines which are ready for production), 25 blocks were offered for auction, of which till now 13 have been auctioned.
While auction of one block - lohari - was on at the time of going to press, another block (Jamkhani) will be auctioned out on March 13. Therefore a total of 15 blocks in Schedule - III are to be auctioned.
This takes the total number of blocks auctioned by the Government (taking into account lohari and Jamkhani also) in both the schedules to 34. As of now, the Centre has managed to garner around Rs 1.72 lakh crore through auction of 32 blocks (excluding the two aforementioned reserves). Once lohari and Jamkhani are bid out by this weekend, the Government is expecting to pocket an amount close to Rs2 lakh crore, sources said.
They added that the main purpose behind the Government's move of promulgating the Coal Mines (Special Provisions) Ordinance (which was replaced by a Bill of the same name and was passed by lok Sabha on March 5), was to ensure that at least the Schedule - II blocks are auctioned out before March 31, 2015. This deadline was set by the Supreme Court for the Government to put up on auction those blocks (out of the 204 reserves which it had cancelled last year) which are still under production.
With the under production having been auctioned out, the legislation has more or less served its purpose, and moreover even the auction of Schedule - III mines is almost over, sources close to the development, said.
Also the blocks under both the schedules have been given away through the transparent process of auction much before the March 31 deadline, therefore even if the Bill does not find favour in Rajya Sabha, there won't be much pressure on the Government, they added. At the same time, the scenario regarding the action to be taken on the remaining 100-odd blocks (out of the total 204 cancelled reserves), will become clear only by around April, sources said.
The amount of proceeds has been calculated based on extractable reserves and highest bid price. Sources said that the proceeds generated through auction will reach the respective state governments (where the auctioned blocks are located) in a phased manner over the next 30 years. The amount will reach the states on the 20th of every month, and it will be routed through the Nominated Authority of the Coal Ministry, they added.
The Government however has managed to auction out only 34 blocks under both the schedules, out of the total 50 reserves which it had put up for auction. Under Schedule - II, out of the 25 blocks while 19 were bid out, the remaining six reserves could not be given away owing to various reasons like pending court cases, less than required number of technically qualified bidders and in one case the block was withdrawn as it was located in an inviolate area, sources said.
Similarly under Schedule - III, of the total 25 blocks only 15 could be successfully auctioned out. The remaining 10 reserves could not be auctioned owing to reasons similar to the ones faced by blocks offered under Schedule - II.