Coal auction: Eight blocks to go under hammer from January 18

New Delhi: The government Thursday kick-started the process for the fourth round of e-auctioning of eight coal blocks, which is slated for January 18-22 next year.

The last three rounds of auction have generated proceeds of more than Rs 3 lakh crore, which would be realised over 30 years by states where the mines are located.

"It has been decided to auction eight Schedule III coal mines earmarked for non-regulated sectors like, iron and steel, cement and captive power plants in the fourth tranche. The e-auction for these mines will be held from January 18 to January 22, 2016," Coal Secretary Anil Swarup said addressing the media here.

Directions have been issued to Joint Secretary, Coal, Vivek Bhardwaj, who is the nominated authority to conduct the auction, and the notice inviting tenders will be issued tomorrow, Swarup said.

"Commencement of sale of tender document will start from December 31 while the vesting order by the nominated authority to successful bidders will be issued by March 10," the Secretary said.

The coal blocks to be put under the hammer include Brahmapuri and Suliyari in Madhya Pradesh, Bundu and Gondulpura in Jharkhand, Gondkhari and Khappa & Extn in Maharashtra and Jaganathpur A and Jaganathpur B in West Bengal.

These mines together have reserves totaling 1,143.42 million tonnes (MT) and their peak rated capacity stands at 12.86 MT.

Asked how much the government plans to raise from this fresh round of auction, the Secretary said the same depends on the response from bidders.

Swarup said 34 blocks had been allocated or auctioned under Schedule II (either producing or likely to produce mines), of which one is under litigation and seven of them have recorded over 5-MT output.

The rest, he said, are likely to start production "in next two to three months" as all issues including necessary clearances, stamp duty, handing over of assets etc have "fortunately been resolved on the intervention of Prime Minister who himself reviewed the projects".

Mining leases have been granted in 29 cases and remaining four will also get it soon, he said.

The Supreme Court in September last year had cancelled allocation of 204 coal mines to companies without auction.

The Secretary said Coal India is "well on way of achieving 550 million tonne coal production target" for the current fiscal and has crossed the 300-MT output mark this week.

Swarup said, "Coal production has crossed 300 MT. It crossed about 3 days ago. This year the coal production is growing at around 9 percent, arguably the highest ever growth ...Over and above a record production last year wherein the production grew by 32 MT which was more than the cumulative production in the previous three years. On that base, which was, we are growing at 9 percent."

He said consequent to the increase, the coal-starved power utilities now have "an inventory of about 19 days" and imports have decreased in the past four months.

"Overall there is a reduction of 4.56 percent (in imports) as compared to the previous year," Swarup said.

The Coal Secretary said with "phenomenal work" by the Railways Ministry, the rake availability for transportation of coal has increased to an average of 205 from 183 last year while the average rake availability rate in November shot up to 224.

"Though the coal production is growing by 9 percent, the offtake has grown by 9.8 percent, inventory at pitheads is coming down," he said.

With increased dry-fuel production the electricity generation in September grew by 8.8 percent, he said.

Attributing the higher coal production to faster land acquisition and expeditious regulatory clearances, Swarup said, "More than 2,500 hectares of land has been acquired for Coal India" while 41 clearances were given by the Ministry of Environment and Forests.

To ensure quality coal supply, he said the government has taken a decision to supply crushed coal from January 1.

"We took a decision to ensure that coal is crushed to requisite levels before it is transported and from January 1, 2016 all coal will be crushed to that level before it is transported except where you have a pit head plant that does not require such crushing," the Coal Secretary added.

Coal India, he said, is also well on its way to set up 15 washeries to supply clean coal.

The Secretary said the government was committed for rationalisation of coal linkages for which a study has been conducted by the KPMG and now the implementation has begun.

"So far rationalisation has been done for 19 thermal coal plants. This is resulting in annual saving in transportation cost by 1,423 crore. 21.4 MT of coal movement involved.

He said the government is also considering whether linkages of inefficient plants could be diverted to efficient plants so that more electricity could be generated.

"This would be a part of the UDAY package that has been announced by the government in terms of revival of the discoms....We are also considering allocation of linkages to the states that they can seek bids on tariffs on linkage.

"...Instead of allocating linkage to a plant, the allocation gets to the state and in the same manner in case of bidding they will seek tariff on that linkage so as to bring down the cost of power for discoms which will help them in the package," Swarup said.

He said the government has also identified a few blocks that would be allocated under UDAY to such states that prepare the package so that those blocks could again be auctioned seeking a lower tariff adding, it is aimed at reducing power cost.