New Delhi: Paving the way for start of an auction process beginning tomorrow, the government today approved re-promulgation of the coal ordinance and necessary guidelines for mine allocations and said the coal-rich states stand to earn Rs 7 lakh crore over the next 30 years.
These states include Odisha, Jharkhand and West Bengal, which account for most of the 204 coal blocks whose allocations were cancelled by the Supreme Court and the government is now re-allocating them -- through aution or direct allotments.
The auction process, for which the guidelines were approved by the Union Cabinet today along with the ordinance, would start with 24 mines tomorrow. This will include 7 for the power sector, 16 for other end-use steel and cement plants as also captive power units, and one mine for steel.
The Ordinance was re-promulgated a day after the conclusion of the Parliament's winter session during which the legislation could not get through.
"Coal Ordinance was passed by the Lok Sabha, but debate on it was not allowed in the Rajya Sabha... With the re-promulgation the unfinished process of allocation of coal blocks will resume again," Finance Minister Arun Jaitley said at a press conference after the Cabinet meeting.
"The guidelines have (also) been approved for the methodology," he added.
Jaitley emphasised that "if Parliament is not allowed to function, the framework of the Constitution has even provided that the decision making of the country does not come to a halt... Stalemate and obstructionism can't go out in perpetuity."
Coal and Power Minister Piyush Goyal said the auction would not only result in "lakhs of crores of rupees" benefits to eastern states like Jharkhand, Chhattisgar h and Odisha but also help reduce power tariff for common man.
"MSTC will be conducting those auctions, SBI Cap is the transaction adviser and the whole process will be completed for the operating and ready to operate mines before March 31 to be quickly followed with more mine in schedule three," Goyal said.
Coal Secretary Anil Swarup said the eastern states, as per conservative estimates, stand to gain Rs 7 lakh crore from auction and royalty over the next 30 years.
"One calculation tells us that if the 70 per cent of the mining is for power... and 30 per cent is for non-power and if the extractable quantities is about 50 per cent... the total payment to the states in 30 years would be around Rs 3.5 lakh crore for 30 years from 204 blocks that have been cancelled by the Supreme Court," Swarup said.
In addition to this almost am equivalent amount will also flow to the states' coffers by way of royalty, Swarup said, while adding that the total gains could be to the tune of around about Rs 7 lakh crore over a span of 30 years.
In addition to this almost am equivalent amount will also flow to the states' coffers by way of royalty, Swarup said, while adding that the total gains could be to the tune of around about Rs 7 lakh crore over a span of 30 years.
The auction and allotment will reduce imports, Goyal said, adding that the thermal coal import can also be brought down significantly and the government was aiming to eliminate it completely in the next 2-3 years.
