Coal news and updates

Advisory Group may discuss de-allocation issue on Oct 27-28

October 21: The Advisory Group for Integrated Development of Power, Coal and Renewable Energy is likely to meet on October 27 and 28 to try and find ways to address the issues arising out of de-allocation of captive coal blocks by the Supreme Court, ICMW understands.

The Group, headed by former Power Minister Suresh Prabhu, may suggest a few measures that the Bharatiya Janata Party-led NDA might take in the aftermath of the Supreme Court ruling, which termed all the allocations, except four, as illegal.

On October 21, the government recommended promulgation of an Ordinance to facilitate e-auction of coal blocks for private companies for captive use and allotting of mines directly to state and central PSUs.

Before the government decided to recommend promulgation of the Ordinance, it was expected that the Group might not recommend e-auction of de-allocated coal blocks as there is a perception that this might lead to an increase in the cost of power generation.

It was also expected that the group may also consider giving first right of refusal to the original allocate where blocks are already in production in case e-auction is not feasible.

However, after announcing the decision to recommend promulgation of the Ordinance, it is clear that the Advisory Group may come out with a different version to address the issue.

Whatever decision is taken at the upcoming meet, one thing is clear that the de-allocated operational blocks will not be taken over by Coal India Ltd (CIL) as this would amount to nationalisation and such a scenario would be avoided by the government as it would severely dent foreign investment in the sector, industry sources feel.

“CIL will only facilitate normal operations at the working blocks till the government comes out with a solution, but complete takeover is an issue which nobody would like to advocate,” sources feel.