Auctioning linkages as next step to bring reform in coal sector, says coal secretary

The government is contemplating to introduce auctioning of coal linkages through competitive bidding as the selection process


Jasleen Kaur | March 5, 2015 | New Delhi

#Coal   #coal secretary anil swarup   #coal mines bill   #coal block auction  

With an aim to bring in reforms in the coal sector, the government will soon allot linkages with greater transparency.

In an interview with Governance Now, coal secretary Anil Swarup said after transparent e-auction of coal blocks, next step to bring reforms would be to bring transparency and user technology in terms of providing linkages.

“Right now it is done through a committee and they take a call on who should be given and at what price it should be given. We would like to bring transparency in this and we are working on this.”

He said, “My contention was in regulated sector it may not be a problem because the concessional price of the coal gets passed on to the tariff and it remains low. But in un-regulated sector there are issues concerned. How would be decide whether cheap coal should be given or not and if it should be then who should be given? How should we determine this?”

Thus, the government is contemplating to introduce auctioning of coal linkages through competitive bidding as the selection process, he added.

The government is working on a plan under which coal blocks would supply fuel to the nearest power plant by swapping coal linkages.

He explained that under present arrangement, most of the power plants have linkages to coal blocks located far away. This leads to heavy expenditure on transportation.

Swarup also said that under the second phase of coal block auction, which was started on March 4, three blocks were put on auction. Of which, two have closed and one is still going on.

Meanwhile, Lok Sabha on Wednesday passed the Coal Mines bill to allow e-auction of coal blocks after the Supreme Court cancelled their allocation leading to uncertainty in the coal sector. The Coal Mines (Special Provisions) Bill, 2015, would replace two ordinances issued by the government, the first in October and the other in December last year, after the apex court cancelled the allocation of 204 blocks.

On the issue of central government being criticised for not consulting states, he said on every step the state governments were consulted. And allocation of mines for different sectors was based on scientific criteria.

“If a mine had a low quality of coal then obviously it could not go to power. And if a mine is really big, it cannot go to an industry which does not require that much coal. By and large it will go to power sector. There was a technical committee which determined this criterion,” he said.

He said all these questions are being raised only because coal blocks have brought so much of value.



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