While the Government is eyeing a huge financial bonanza worth close to Rs1 lakh crore through the ongoing auction of 19 under production coal mines which has seen some aggressive bidding from corporate entities, sources associated with the exercise have accepted that the bidding for blocks where production is yet to start, may not be as aggressive since they are not fully ready to be mined.
In such a scenario, there is a possibility that bidding of yet to produce blocks (which are placed under Schedule III of the auction list) may happen only in the next fiscal, as the Coal Mines (Special Provisions) Ordinance - through which the current auctions of under production blocks are taking place - will lapse on April 5.
Official sources said that as many blocks under Schedule III are still not prepared to be mined, the bidding may not be as enthusiastic for them, compared to the kind of aggression shown by bidders for Schedule II (the under production mines who are currently being auctioned). They further added that the intent of the Government was to first auction out the Schedule II mines as these blocks had been given time till March 31, 2015 by the Supreme Court to wind up their operations. Therefore, the priority was to wrap up their bidding much before the due date, sources said.
Of the total 19 mines placed for auction under Schedule II, 15 have already been auctioned off over the last one week by the Government. “We were only trying to hold the auction of Schedule III mines along with Schedule II ones, to see if some of them could also attract bids. But it seems that the Schedule III mines may be put on the block only afterwards,” a source told The Pioneer.
The Government had promulgated the ordinance in December 2014 just before the commencement of the Winter session of Parliament to initiate the bidding process of coal blocks. Though the NDA regime managed to get the bill (which was to replace the ordinance) passed in the lok Sabha where it is in majority, the proposed bill failed in Rajya Sabha. This forced the Government to re-promulgate the ordinance in January 2015, and if it again fails to clear Rajya Sabha during the forthcoming Budget session of Parliament, then the under production blocks’ auction may happen only some time during the next financial year.
Meanwhile the windfall proceeds from the ongoing auction of Schedule II mines till February 19, was Rs 83,662 crore, which will go to the states where the said blocks are located, Coal Secretary Anil Swarup said during a press conference on Friday. He said that these proceeds for coal bearing states are over the 30-year life of the mines. Swarup further added that the states will get additional royalty of Rs 12,801 crore in 30 years from mines auctioned until February 19.
Also the coal mines auctioned to power companies till the aforementioned date, will lead to tariff concessions worth Rs 37,050 crore rupees in 30 years, the Coal Secretary further informed. In a related development, saddled with the responsibility of achieving the production target of 1 billion tonne per annum by 2019, Coal India limited (CIl) plans to identify such projects which have the capability of robust production and can help in achieving this target.
Out of this, 908 million tonnes is to be the expected contribution from the identified projects. CIl Chairman Sutirtha Bhattacharya, who was also present in the press conference, said that the two CIl subsidiaries Sambalpur based Mahanadi Coalfields limited and the Bilaspur based South Eastern Coalfields limited are expected to play a pivotal role in the company’s quest of attaining the 1 billion tonnes target.