Eastern states eye Rs 1,280 crore as coal auction proceeds

New Delhi: Coal-rich eastern states are in for a bonanza as they will get close to Rs 1,280 crore from the latest round of coal auction by this month-end, with Rs 650 crore already transferred to their kitty.

The last three rounds have generated proceeds of more than Rs 3 lakh crore, which would be realised over 30 years by eastern states like Jharkhand, Chhattisgarh, Odisha, West Bengal, in addition to Maharashtra and Madhya Pradesh, where these mines are located.

"As provided in the Act, the proceeds of coal block auctions will go to states. We have already transferred Rs 650 crore to states and another Rs 630 crore will go to them by the end of the month," Vivek Bhardwaj, the nominated authority to conduct coal block auction, told PTI.

Bhardwaj said fund flow will pick up as the mines start producing.

Of the 34 coal blocks that had been allocated or auctioned under Schedule II -- either producing or likely to produce mines -- one is under litigation and seven of them have recorded over 5 million tonnes (MT) of output.

The rest 26 blocks, as per the government, are likely to start production "in the next 2-3 months" as all issues, including necessary clearances, stamp duty, handing over of assets etc, have been resolved on the intervention of Prime Minister Narendra Modi, who himself reviewed the projects.

These auctions were done in three tranches while the process for the fourth round in which eight coal blocks will go under the hammer has been set into motion. These eight blocks will be auctioned on January 18-22 next year.

The mines to be put on the block 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.

The amount to be raised from this round will depend on the response from the bidders.

The Supreme Court in September last year had cancelled allocation of 204 coal mines to companies without auction, which led to the government announcing the ongoing auction.

Official auditor CAG had said that the mines allocation without auction during the previous regimes led to a notional loss of staggering Rs 1.86 lakh crore.

However, the proceeds to be realised during the next 30 years, as per the government announcements, have already crossed Rs 3 lakh crore mark.