Govt to appoint coal block consultant

The coal ministry plans to start bidding for 50 captive coal blocks from June may get delayed a little. Pushed into a corner by the draft CAG audit report over allocation of coal blocks sans auction to scores of public and private companies during 2004-2009, the ministry has decided to appoint a consultant to fix up the method of calculating the price of a coal block before putting it out for bidding.

This, according to a ministry official, may take some time as so far, only the expression of interest’ has been invited from the consultants. ‘‘There are many companies that have expressed their interests (to become the consultant). However, since this would be for the first time that we are looking at a specific method to calculate the price of a coal block, it may take sometime before the actual bids for the coal blocks are open,’’ the official said.

As per the competitive bidding rules, the coal ministry will call separate bids for government, private and power companies. The ministry has already decided that of the first 50 coal blocks that would allocated on the basis of competitive bidding, 16 would be for power companies, and another 12 blocks for commercial mining. There are two coking coal blocks that would be given to steel companies and remaining would be for other sectors like cement and sponge iron.

All these blocks are in ‘no go area’ and would be bid out on reserve and floor price basis. The ministry will fix up a ‘reserve price’ at which the blocks would be allocated to public sector companies. For private companies, they would need to bid over the floor price. ‘‘The consultant would help us fix the reserve\\floor prices and the blocks would be awarded on the basis of requirement of the companies," the ministry official said.

The coal blocks, at the moment, are offered on the basis of preferential basis by an inter-ministerial screening committee.

The faster allocation of coal block is significant to meet the growing requirement of coal in the country. In the current fiscal, the coal production till January was down to 413.9 million tonne (mt) as against 424.5 mt in the same period a year ago.