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Monday, December 12, 2011

Coal ministry to auction 54 blocks on upfront payment basis

Monday, 12 Dec 2011

ET recently reported that the Indian coal ministry has decided to auction 54 blocks on upfront payment basis but might not offer mines to power companies. The ministry is mulling a proposal to earmark blocks to states that can call competitive bids for power supply.

The coal ministry has also decided that blocks will not be given free to government companies.

A senior coal ministry official said that blocks with over 18,000 million tonnes of reserves would soon go under hammer in the first round of competitive bidding. The government has not awarded single coal or lignite block for captive use to private companies since October 2008.

The coal ministry would initiate auction within a month by putting the list of blocks on its website. Information on estimated reserves, exploration status and environmental clearances would also be provided.

The ministry official said that "Based on comments received from stakeholders, we have decided to bid coal blocks on the amount of upfront payment a bidders agrees to pay. We would soon put the list of blocks earmarked for each sector including steel and cement.”

He, however, said there is confusion over power sector for which blocks may be earmarked to states at reserve price. The official added that "The objective is to avoid double bidding for power companies that after January 2011 have to participate in tariff-based bidding to bag power supply contracts from states.”

(Sourced from ET)

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