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Government to soon clarify concerns from coal bidders

21 Apr 2014 Evaluate

The inter-ministerial committee (IMC) will soon clarify concerns raised by bidders for three coal blocks put up for auction. Coal ministry has already held a meeting, headed by Coal Secretary S K Srivastava, to discuss coal bidders’ issues like whether a consortium can have more than four participating companies or not. The meeting also discussed whether bidders should be allowed to take sample of coal from Central Coalfields (CCL) to perform the yield analysis.

In February, the government had started the auction process of two Jharkhand mines - Jhirki & Jhirki (West) of East Bokaro Coalfield and Tokisud-II of South Karanpura Coalfield and Andal Babuisol of Raniganj Coalfield in West Bengal on block. These three mines have an estimated 500 million tonnes of reserves, for captive use of steel, cement and sponge iron firms. The move came after the Comptroller and Auditor General (CAG) criticized the government for delaying the auction process at a time when the country is facing acute shortage of coal.

India, despite being world's fifth largest in terms of reserves, the third-largest producer of coal has failed to keep pace with increasing domestic demand. Indian domestic coal demand is around 35 percent higher than domestic supply, resulting into a high deficit of which a huge part is being met by costly imports from Indonesia, South Africa and Australia. Presently, Coal India (CIL) is the only producer of domestic coal accounting for around 80 percent of the domestic production. CIL is currently also struggling to meet domestic coal requirement. Acute coal shortages in the country have become primary reason for power deficit as coal-fired plants account for 68% of India's installed electricity capacity. Meanwhile, in order to meet India’s growing coal demand, the government has planned to invite bids from private players to start coal mining in a public-private partnership (PPP) mode in the country, which would also end the monopoly of public sector unit Coal India.

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