Govt says auction of 67 coal mines likely to generate Rs335,370-cr revenue

The reallocation of 67 out of 204 coal blocks cancelled by the Supreme Court, through auction this year is likely to generate revenue to the tune of Rs3,35,370 cr to the government, minister of state for power, coal and new and renewable energy Piyush Goyal informed the Lok Sabha in a written reply today.

The estimated amount of revenue likely to be generated from the auction / allotment of these 67 coal mines / blocks is Rs3,35,370 crore, approximately. In addition, the benefit to consumers in terms of reduction of electricity tariffs is likely to be about Rs69,310.97 crore, the minister said.

He said the auctioned 67 coal blocks, 14 are in Chhattisgarh, 20 in Jharkhand, 5 in Madhya Pradesh, 9 in Maharashtra, 7 in Odisha, 1 in Telangana and 11 in West Bengal.

One coal block namely, Ardhagram, where the successful bidder was declared, has been handed over to designated custodian in view of a court case, the minister said, adding that no time limit has been fixed for completing the allocation process of these 204 coal blocks.
Goyal said the auction process for non-regulated sector, viz, iron and steel, cement and captive power was based on forward bidding process where bidders had to submit their final price offer above the applicable floor price.

In the case of power sector, which is a regulated one, reverse bidding methodology was adopted where bidders had to submit bids below the applicable ceiling price, which shall be taken as fuel cost in determination of power tariff. In case, bid price reaches Rs0 in reverse bidding, the bidding is based on additional premium payable to the concerned state government, over and above the fixed reserve price of Rs100 per tonne.
The minister further stated that revenue which would accrue to the concerned coal bearing state comprises upfront payment as prescribed in the tender document, auction proceeds and royalty on per tonne of coal production.

The auctioning and reallocation of the coal mines were carried out under the provisions of the Coal Mines (Special Provisions) Act, 2015 and the rules made there under, the minister added.