States favour competitive bidding for allocation of captive coalmines

States have favoured a competitive bidding system for allocation of coal and lignite blocks for the purpose of captive mining, which they feel, would make the system of allocation more transparent, fair and objective.

A meeting of 18 coal and lignite bearing states, including ministers from seven states has arrived at a broad consensus on the introduction of a system of auction through competitive bidding for allocation of coal/lignite blocks as recommended by the standing committee on steel and coal, an official release said today.

The centre, however, plans to incorporate a provision in the Mines and Minerals (Development and Regulation) Amendment Bill, 2008 to give preference to a company that proposes to set up the end-use industry within the state in which the coal block is located, minister of state for coal (independent charge) Sriprakash Jaiswal said.

Chairing a meeting of the state ministers in charge of mining and geology, Jaiswal said the preference is proposed if a bid is within 5 per cent of the highest bid and the company is willing to match the highest bid for that block.

The states underscored the importance of attractive resettlement and rehabilitation packages as per the national or state policy to be offered to the project affected families so that the process of land acquisition could be completed smoothly.

They also suggested that firm commitments on corporate social responsibility in terms of either detailed schemes or certain percentage of profit should be obtained at the time of bidding itself.