The Coal Minstry on Tuesday released draft guidelines for allocation of 74 coal blocks.

The Centre government plans to conduct two-stage bidding under the Coal Mines Special Provisions Ordinance. Qualified bidder in stage one would be asked to put in financial bid under an electronic auctioning process. The bidding would be open to specified end use projects in power, steel and iron, and cement sectors.

The tender documents, which are to be issued later. would specify the technical and financial qualification of participants in the auction. The today made public a set of draft rules under the ordinance.

Under the rules, the Centre plans to allow a successful bidder of coal mines to use coal from the mine allocated to it for any its other plant after prior intimation the government.

The rules also leave room for mines notified by the central government and figuring in Schedule 1 of the ordinance for allotment directly to power companies, which have bagged projects through competitive tariff route.

In the event that the successful allocatee is not the same as the prior allottee then the prior allottee would be entitled to compensation. Such compensation would be determined by the nominated authority, which has already been constituted by the ministry of coal. The compensation would be based on the written down value of the mine infrastructure in the statutory balance sheets of the company. Employees’ dues, payment to secured creditors and all revenue payment to the government would be given priority for disbursal of proceeds. Read more

Courtesy: Business Standard