Photo by: Bloomberg
KOLKATA (miningweekly.com) - India’s Coal Ministry is expected to scrap the bidding for four coal blocks earmarked for power distribution companies controlled by provincial governments, owing to poor responses.
The four coal blocks, with an estimated reserve of two-billion tonnes, were put up for auction, allowing power distribution companies controlled by the provinces to put in bids. The successful power distribution companies would thereafter award the coal blocks to power project developers in their respective provinces.
According to Ministry officials, the decision to scrap the bidding process already under way would be announced shortly.
The officials said that the eligibility criteria for bidders would be relaxed so that even provincial government-controlled power generating companies could participate in the auction of the four blocks.
However, the relaxation of the eligibility criteria and starting the auction afresh would have to wait until the Indian national elections - starting next month - were completed and a new government was in place, as the current election code of conduct laid down by the Election Commission of India, barred the government from making any policy decision that may influence voters, the officials added.
Among the primary reasons cited for the poor response from power distribution companies was the inexperience of the latter in developing coal blocks, including securing land, mandatory approvals and negotiating contracts with mine-developer operators before awarding the block in question to a power project developer.
The aborted auction had also proposed to give weight to bids from power distribution companies operating in power deficit states, but unfortunately, on the contrary, most of the bids were from power surplus provinces, the official added.
Last year, the Coal Ministry had sought bids for four coal blocks - Karadabahal, Brahmanbil, Phulajhari East and Phulajhari West, all part of the Talcher coalfields in eastern Indian province of Odisha.