Plants which are linked to these reserves could continue getting linkages till the time these blocks are put up for auction
Though the Supreme Court has given an extension of six months till March 31, 2015 to the 42 cancelled coal blocks which are under production, for shutting shop, the Coal Ministry is learnt to have prepared an action plan wherein the end-use plants which are under operation and were linked to these reserves, may continue to get coal linkage.
According to sources familiar with developments in the aftermath of the Supreme Court’s September 24 judgement (in which it had cancelled 214 out of the 218 blocks allotted between 1993 and 2010), though the aforementioned blocks are to come under Coal India ltd’s (CIl) control after March 31, 2015, plants which are linked to these reserves could continue getting linkages, till the time these blocks are put up for auction.
The Coal Ministry, they added, plans to set up an inter-ministerial panel which may look into this possibility.
If the Government plans to auction the cancelled blocks, this is something, which according to sources, may take up two to three years time. In the meanwhile the possibility of providing short term linkages to end-use plants which are operational and are linked with the aforementioned blocks, is being thought of.
Here too, sources pointed out that the quantity of coal could be quite rationed, as it will be for a short term period. This, they added, could depend on the terms and conditions set under the fuel supply agreement (FSA, signed by the plant owner with the block holder) or the satisfaction level of the block holder.
However, the availability of coal will largely depend on the dry fuel’s quantity available in the coal blocks which have been acquired by the Government from private entities. All these aspects will have to considered by the proposed inter-ministerial panel which the Coal Ministry is planning to set up.
On September 24, in a significant judgement the Supreme Court had quashed allocation of 214 out of 218 coal blocks allotted to various companies between 1993 and 2010, terming it as “fatally flawed” and allowed the Centre to take over operation of 42 such blocks which are functional.
The apex court had said the beneficiaries of the illegal process “must suffer” the consequences and refused to show sympathy to private companies which submitted that Rs 2.87 lakh crore have been invested in 157 coal blocks and Rs 4 lakh crore in end-use plants.
In this scenario, the aforementioned proposal from the Coal Ministry, could come as a major relief to the end-use plants which are linked to the cancelled blocks.
Meanwhile another possibility of CIl engaging a firm of consultants through a competitive
bidding process, to help it take control of the cancelled blocks, is also emerging
The consultant(s) could help CIl in preparing the documentation work of the coal mines which it will take over after March 31, 2015, sources added.