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Open bidding is the best option for coal block allocation - No break in coal supplies to power firms, says Minister

  • With the Supreme Court final verdict on coal blocks allocation expected anytime soon, pressure is mounting on the Ministry for Coal to have alternative plans ready to ensure continued fuel supplies in case of de-allocation. The Ministry was recently asked by the Prime Minister’s office to spell out the ‘Plan B’ in case the verdict de-allocates the 218 coal blocks given between 1993 and 2010. Coal Minister Piyush Goyal has been maintaining that his Ministry will wait for the verdict and then take measures to ensure uninterrupted supplies. He had said that his Ministry will take quick decisions. According to officials in the Coal Ministry, there are two the legal options available to them in the worst case scenario (de-allocation) – acquisition of unworked land of coal producing blocks or takeover of entire assets and hand them over to a Government appointed custodian.

  • Those associated with the developments said that open bidding was the best option available for future block allocations. The Ministry will need to work out on the nitty-gritty of the design of the contracts. Some also refer to the Parakh panel recommendations which endorsed open bidding. Meanwhile, at an event here Syedain Abbasi, Joint Secretary, Ministry of Steel, said the time of direct allocation of coal blocks is over. Abbasi said, “We now need to debate whether or not to allow merchant mining in the case of coal while allocating the blocks and probably should not tie up the end use.” “There is definitely a significant amount of reform required in the sector,” he added. Naveen Jindal , Chairman, Jindal Steel and Power Ltd, said that private participation in coal mining should be encouraged.

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