Cabinet clears ordinance on coal blocks’ e- auction

Jaitley: Transparent process, over in 3- 4 months

In a bid to settle issues arising out of the Supreme Court decision to cancel 214 coal blocks allocated since 1993, the government on Monday decided to recommend the promulgation of an ordinance to facilitate eauction of coal blocks for private firms for captive use and to allot mines directly to state and Central PSUs. This is seen as a major step towards reforming the coal sector to ensure energy security.

Finance minister Arun Jaitley told reporters Monday the Union Cabinet, at a meeting chaired by Prime Minister Narendra Modi, had “recommended promulgation of an ordinance in order to resolve pending issues, particularly the situation arising out of the Supreme Court judgment quashing the allocation of coal blocks”. State sector requirements, including those of the Central and state governments, will be met and the mines allocated to PSEs like NTPC or state electricity boards.

“As far as the private sec- tor is concerned, actual users of coal in cement, steel and power sectors who apply for a certain number of coal mines will be put in the pool and there will be an e- auction. A sufficient and adequate number of mines would be put so actual users go back with the mines,” the minister said.

Mr Jaitley said the auction process will be “transparent” and completed in “three to four months”, with proceeds going entirely to states where the mines are located.

The government on Monday decided to recommend the promulgation of an ordinance to facilitate eauction of coal blocks for private firms for captive use and to allot mines directly to state and Central PSUs.

“The entire mess that the UPA had left behind from 2005 onwards over the next four months would be cleaned up,” the finance minister said, adding coal worth $ 20 billion which was being imported annually would be domestically substituted through this measure.

The biggest beneficiaries would be the eastern states like Jharkhand, Orissa, West Bengal and Chhattisgarh. States like Madhya Pradesh, Maharashtra and Andhra Pradesh would also benefit.

“This will financially empower particularly the eastern states ( which have most of the coal mines) and lakhs of labourers would get employment while bank capital held up with the companies, which were allotted the blocks, would be fruitfully utilised,” Mr Jaitley said.

The minister, however, vehemently denied a suggestion whether the process could be termed as “de- nationalisation” of the coal sector. Asked whether the companies whose allocations were cancelled by the apex court would be allowed to participate in the e- auction, coal minister Piyush Goyal, who was also present at the briefing, said, “Any convicted company will be debarred.”