RAIPUR: The excessive delay in the start of production from the coal mines allocated through the commercial auctions by the Centre has exceedingly upset the successful bidders.
The sixth tranche of such an auction for 32 mines launched in November last year received an overwhelming response as the reforms in the coal sector looked promising.
However, the lingering is said to be causing a loss of Rs 40 crore or more per month to the state exchequer in terms of statutory and revenue share payments per coal mines besides lagging behind to meet the nation’s growing power demand from the coal-fired thermal plants.
Various investor organisations declared as successful bidders in the commercial coal block auction find themselves in a fix even after the coal blocks order had been vested to them.
The reason is their area limit for allocated coal blocks. The limit for which, a prospecting license or mining lease may be granted in respect of any mineral, which could be a total area of more than 10 sq km or 25 sq km or 50 sq km, as specified under Section 6 (1) of Mines and Minerals (Development and Regulation) Act, provided the Centre and the state are convinced on relaxing the limit if it remains in the interest of development of any mineral or industry and recorded in writing from the concerned state government.
According to these firms, the government of India as part of the coal block bidding process should release vesting orders with relaxation in the given limits, as all blocks are being granted on commercial terms for which the bidder paid premiums in addition to royalty and other taxes.
“Any restriction, if applicable, either should have been done before the bidding process and waived or asked the bidder to take approval before participating in the commercial auctions. Such situations are distressing”, one of the presidents awaiting a mining lease for his firm told The New Indian Express.
The Centre claims to work on a vision to secure coal availability to meet the demands of various sectors of the economy giving the highest priority to ease of doing business.
"But firms like Jindal Power Ltd, BALCO, and CG Natural Resources Ltd are worrying as the coal ministry is yet to take initiative on the official minutes submitted to it from Chhattisgarh state," said a government official.
Both the Centre and the states need to expedite the remedy elucidated on the same cause of the Section 6 (1) with the follow-up action for relaxing the limits for the coal blocks allocated to the organisations, the firms stated.
Some firms approached the coal ministry but were asked to proceed via the state government that can submit in writing for consideration on relaxation with justification for the successful bidders. The investors had to repeatedly urge the state government for the needful.
There are bidders with an allocated mine area of over 30 sq km but their mining lease is yet to commence owing to the aforesaid reason.