Centre eases rules for auction of coal blocks

New Delhi: Having failed to attract any bidders in the last three years for coal blocks, the NDA government — keen to attract greater participation from the private sector — has now tweaked the process wherein the time period for seeking clearances by allottees and commencing operations in the blocks has been increased to 66 months from 44.

The easing of norms has been done as sources privy to developments said that the coal ministry has now made preparations to put up 18 blocks for auction — which would be the sixth round of bidding. While in 2015-16 it had managed to auction and allot 84 blocks in three rounds, the fourth and fifth rounds were resounding flops and had to be annulled as no bidders showed up for the 15 blocks in total which had been put up for auction under them. This relaxation also comes in the light of the fact that out of the 84 blocks which were allotted or auctioned to public and private sector companies in the initial three rounds of bidding, according to figures available with this newspaper, only 22 coal mines have managed to receive opening permission from the authorities concerned  between 2015-16 and 2018-19. The NDA government —which had lambasted the previous UPA regime for its lack of transparency in allotment of coal blocks, and had ensured auction of coal reserves and promised faster environmental clearances by assuring greater cohesion between all the stakeholders (namely coal, power, steel, mining and environment ministries) after initially succeeding in allotting 84 blocks — had failed to attract buyers since 2015-16 in two  attempts of auction. This was because bidders stayed away from the process owing to some tough conditions.

Now in order to ensure that the forthcoming round of auction is a success, the government apart from relaxing timeframe for bidders for seeking clearances and operationalising the mines has also allowed allottees to show 80 per cent of annual committed production in the first five years of allotment. Earlier allocatees had to complete their production target in the first five years itself.

Sources within the government have admitted that the difficulties being faced by successful bidders in actually managing to operationalise the coal mines have arisen mainly due to factors like delay in land acquisition, environmental clearances and long winding processes being followed by state governments where the mines are located.

The 18 blocks being offered in the fresh round of auction are for end-users in theiron, steel, cement and fertiliser sectors.