Government today moved a bill in the Rajya Sabha, which provides for allocation of coal blocks through auction to private companies replacing allocation by a government screening panel.

Moving the Mines and Minerals (Development and Regulation) Amendment Bill, 2008, Mines Minister B K Handique said the present system of allocating coal blocks through a screening committee "is vulnerable to criticism on the ground of lack of transparency and objectivity."

Presently, an inter-ministerial screening committee, which includes representatives from concerned state governments, allocates coal blocks to private firms engaged in generation of power, production of iron and steel and some coal washeries.

However, competitive bidding route will not be applicable to the blocks given to the state or central government owned companies.

Participating in the debate, trade union leader R C Singh (CPI) said private sector companies are already sitting on 138 blocks of coal without starting any operation.

Several companies, which have no links with power or steel sector have also been given the blocks, he said, and complained that "people making Zandu balm and Chyawanprash have got coal blocks."

Singh said the companies, which will bag the coal leases through auction, would not go in for deep mining and instead engage in the open cast mining, endangering environment and forests.

Quoting Environment Minister Jairam Ramesh, Singh said companies like Vedanta Resources have already violated forest rules.

S S Ahluwalia (BJP) said several companies without power plants were born overnight seeking coal block allocation.