NEW DELHI: The government will protect power consumers from getting a tariff shock from coal block auction and cap the number of mines or quantity of reserves that goes to one entity with a view to prevent a monopoly scenario.

“It (auction) is not a revenue-maximizing approach … the essence is to keep a lid on tariff … if not eliminate, alleviate coal supply position,” coal secretary Anil Swarup said on Wednesday, after the coal ministry invited comments from stakeholders on draft norms for auctioning coal blocks.

The ministry is looking at inviting requests for proposals from prospective bidders on December 22 and inviting bids by February 3. Bids will be in two stages — technical and financial. Final bidders will be qualified on the basis of their technical bids by March 3 and financial bidding will get going on March 6. Allocation letters will be issued to successful bidders on March 16.

“It is a work in progress. This is the first time such an exercise is being undertaken. But, we will come out with a clear, transparent process within the stipulated time. There could be some unforeseen issues but for now this is the timeline we have set,” Swarup said.

The Supreme Court had in September cancelled allocation of 204 blocks. In the first lot, 74 blocks are being put on the block. Forty-two of these are in production and 32 are expected to start operations soon. Together, the 74 blocks have the potential to produce 110 million tonnes of coal per year. Read more

Courtesy: The Times of India