Second lot of coal auctions from Feb 25; Rs.84k cr earned till now

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SME Times News Bureau | 21 Feb, 2015
On the seventh day of auction Friday of coal blocks whose allotments were cancelled by the Supreme Court, the government said it will start the second tranche of auctions by Feb 25. The government has till now raised nearly Rs.84,000 crore.

"The second trench will start from Feb 25 (and run) till April 2," Coal Secretary Anil Swarup said in a press conference here.

He said that 27 blocks have been allocated for the unregulated sector, while 56 blocks will go to the regulated power sector.

"Will either auction or allocate 83 blocks by March 31," he added.

The government has till now raised Rs.83,662 crore through the e-auction of coal blocks, the seniormost ministry official said.

Elaborating on the figures, Swarup said that states will be able to collect royalty of Rs.12,801 crore over the span of the blocks' lives. Moreover, poor states like Jharkhand and Chattisgarh stand to gain valuable revenue via the e-auctions, he added.

"The e-auction amount is Rs 83,662 crore. But these blocks will also entail an income to the states by way of royalty which comes to Rs 12,801 crore," Swarup told reporters.

Madhya Pradesh will get Rs 39,900 crore, Chhattisgarh Rs.26,425 crore, Jharkhand Rs.14,498 crore, West Bengal Rs.13,210 crore, Maharashtra Rs.1,819 crore and Odisha Rs.607 crore, he said.

Earlier Friday, UltraTech Cement won the auction for the Bicharpur coal block in Madhya Pradesh with the highest bid of Rs.3,003 per million tonnes . The commercial production from the block will start in fiscal 2018.

On the sixth day Thursday, Jindal Steel won back the Gare Palma II and III mines in of Chhattisgarh is crucial for as those deposits. The mine produces 6.25 million tonnes a year, making it the company’s biggest by output,

Jindal's winning bid of Rs.108 a tonne was in the reverse auction for the Gare Palma mines, where the lowest bidder wins, to help keep low the cost of electricity generated.

Meanwhile, the ongoing auction has vindicated CAG's criticism of the way the natural resources was allocated by the previous government, Commerce Minister Nirmala Sitharaman said Friday.

"The last CAG report on the coal block allocation was unfortunately unnecessarily criticised but today the figures and the way in which the coal block allocation has been designed by this government in a very transparent manner and has shown two things," she told reporters on the sidelines of an event.

"Certainly the CAG's position has been vindicated but I am underlining the larger issue here.Our position has been vindicated," Sitharaman added.

In a 2012 report, the Comptroller and Auditor General estimated coal block allocations during the previous UPA period led to the government losing Rs186,000 crore. The coal blocks were earlier allocated through a screening committee.

After the Supreme Court last September cancelled the allocation of 204 mines, the government decided to auction the blocks.

Nineteen blocks have so far been auctioned in the first tranche, the last day for which is Feb 22.