Sluggishness on part of states in inking pacts with companies which had successfully bid for coal blocks earlier this year, is hampering the bidders' plan to take their early possession and putting them to use for power production. The Government had taken the ordinance route to fast-track the coal block auction process to ensure speedy power generation, but the delay is not only defeating that purpose, it could also have serious financial implications on the bidders' bottomlines.
Also with only 29 blocks having been auctioned off out of the total 110 reserves which the Government plans to put on offer, the next round of bidding could also be delayed. Reliable sources within the Government confirmed to The Pioneer that state governments (under whose geographical jurisdiction the coal blocks are located), are taking their own time in wrapping up the agreement signing process with the entities which have been awarded the blocks. This, they added, is not only delaying the next round of auction, but also defeating the very purpose for which the entire exercise was undertaken - to fast track country's power generation by feeding coal to starved power plants.
As per norms, the entities which have won the coal blocks, were to sign MoUs with state governments where the reserves are located. This was to be the first step towards taking possession of the blocks by the successful bidders and then putting them to use for their specific end-use. More than 90 per cent of the 29 blocks which were auctioned off by the Union Coal Ministry in March this year, were meant for power producers, as the Centre was keen to ensure greater coal supply for stranded power plants.
However, according to official sources, more than two months after the auction process was wrapped up, the concerned state governments - mainly Chhattisgarh, Jharkhand and Odisha - are yet to finish the agreement signing process with the successful bidders. The sluggish approach by the states is affecting the bidders' plans of using the blocks at the earliest in order to kick off their stranded plants.
In fact, industry sources even confessed to the growing frustration and uneasiness within the successful bidders. What is adding to their woes is that they can't even petition the Coal Ministry into nudging the State Government out of their 'slumber', as this could amount to putting 'undue pressure'. In the aftermath of the alleged 'corporate espionage' controversy which unraveled in the Petroleum Ministry, the corporates have become all the more cautious while dealing with the Government, sources added.
In such a situation, with 29 coal blocks yet to be put to use by their successful bidders, the Centre is hamstrung to start the next round of auction. Sources within the Government conceded that State Governments have delayed the pact signing process with the successful bidders and there is a lot of consternation among these entities. The Centre can only request the states to expedite the process keeping the larger interest of enhancing power generation across the country in mind. However with states having their own compulsions, they cannot be pressurised into doing anything, sources said.
Out of the 29 blocks which were auctioned in March this year, 19 are those which are already under production, while the remaining 10 are those that are ready to be put under production. The Government garnered over Rs 2 lakh crore by auctioning these 29 blocks in two phases, surpassing the presumptive loss of Rs 1.86 lakh crore estimated earlier by Government auditor CAG for allotment of mines without auction.