Wants 5 captive blocks to be auctioned before poll code kicks in
In a hurry to mitigate an energy crisis, the Centre is forcing Coal India Ltd (CIL) to appoint private contract miners and auction five captive coal blocks, all before the election dates are announced and the model code of conduct kicks in.
Industry experts say the Centre’s urgency now is almost like what it did nine years back when an emergency plan to deal with the energy crisis landed it in an unprecedented mess.
The proposal to have a contract miner (Mine Developer and Operator, or MDO) has not made much headway due to stiff resistance from CIL and the Director General of Mine Safety (DGMS) on sharing responsibility. The Centre has asked Central Mine Planning and Design Institute (CMPDI) to float tenders for auctioning the blocks, latest by February 5.
The decision to go in for an auction has been taken ignoring grumblings from CMPDI and its consultant CRISIL over lack of preparation and grey areas. CIL’s subsidiary CMPDI has been asked to play anchor on behalf of the government.
Captive block details
Five assets, including three coking (metallurgical) coal and two thermal (steam) coal reserves, will be auctioned in February.
The coking coal reserves blocks are in East Bokaro of Jharkhand and may produce a total of 60 million tonnes (mt) over a 25-year period. The two thermal coal assets are in Ranigunj, West Bengal, and North Karanpura, Jharkhand . The Ranigunj asset is estimated to produce 0.7 mt a year and opencast production is pegged at 1.5 mt coal. Successful bidders have to pay an estimated Rs 45 crore upfront and the bid value will be calculated on per tonne of production. The earnest money will be forfeited if the allottee fails to develop the block within seven years of getting all clearances and acquiring land. Experts wonder whether the auction will be successful, considering the small size of the assets, the steep entry barriers and overall poor sentiments. They also think the outlook for the MDO scheme is not much better.
In a hurry to mitigate an energy crisis, the Centre is forcing Coal India Ltd (CIL) to appoint private contract miners and auction five captive coal blocks, all before the election dates are announced and the model code of conduct kicks in.
Industry experts say the Centre’s urgency now is almost like what it did nine years back when an emergency plan to deal with the energy crisis landed it in an unprecedented mess.
The proposal to have a contract miner (Mine Developer and Operator, or MDO) has not made much headway due to stiff resistance from CIL and the Director General of Mine Safety (DGMS) on sharing responsibility. The Centre has asked Central Mine Planning and Design Institute (CMPDI) to float tenders for auctioning the blocks, latest by February 5.
The decision to go in for an auction has been taken ignoring grumblings from CMPDI and its consultant CRISIL over lack of preparation and grey areas. CIL’s subsidiary CMPDI has been asked to play anchor on behalf of the government.
Captive block details
Five assets, including three coking (metallurgical) coal and two thermal (steam) coal reserves, will be auctioned in February.
The coking coal reserves blocks are in East Bokaro of Jharkhand and may produce a total of 60 million tonnes (mt) over a 25-year period. The two thermal coal assets are in Ranigunj, West Bengal, and North Karanpura, Jharkhand . The Ranigunj asset is estimated to produce 0.7 mt a year and opencast production is pegged at 1.5 mt coal. Successful bidders have to pay an estimated Rs 45 crore upfront and the bid value will be calculated on per tonne of production. The earnest money will be forfeited if the allottee fails to develop the block within seven years of getting all clearances and acquiring land. Experts wonder whether the auction will be successful, considering the small size of the assets, the steep entry barriers and overall poor sentiments. They also think the outlook for the MDO scheme is not much better.
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