According to the draft guidelines, reserve price will be determined before 22nd December, while bidding fees will be based on geological reserves of coal mines
The Indian government has released draft guidelines for allocation of 74 coal blocks. Under the draft rules, issued by the Ministry of Coal, 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 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 floor, reserve price metrics being worked out currently by authorities," Coal Secretary Anil Swarup said, adding that idea is to keep a lid on tariff rather than adopt a revenue maximisation approach. The reserve price will be determined before 22nd December, while the bidding fees will be based on geological reserves of coal mines, he added said.
The due date for coal auction is 11 February 2015. The Ministry hopes to complete technical process of allotment by 3rd March and issue letter of award by 16 March 2015.
The tender documents, which are to be issued later, would specify the technical and financial qualification of participants in the auction.
The Supreme Court had in September cancelled 214 coal blocks allocated since 1993, saying the blocks had been given out in an ad-hoc and casual manner.
The NDA government moved an ordinance late in October enabling auctions of some of these blocks. Finance Minister Arun Jaitley said at the time that an enabling provision would be made later to introduce commercial mining, which would open up the sector to mining companies selling coal to users. However, introduction of commercial mining will require changes to the Coal Mining Nationalisation Act, 1973.
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