Custodian soon for coal blocks withdrawn from auction

The Government will appoint a ‘custodian’ for the coal blocks that have been withdrawn from the auction. The custodian will be appointed according to the provisions of the Coal Mines (Special Provisions), Second Ordinance, 2014.

Due to litigations from Jindal Steel and Power Ltd, BLA Power Ltd and the directions given by the Delhi High Court and the Jabalpur High Court, Madhya Pradesh, the Ministry of Coal had to remove five coal blocks from the auction list. These include Gottitoria East and West from the already producing blocks and Utkal B1, B2 and Gare Palma IV/6 from the ready to produce blocks list.

“The concept of custodian has been proposed in the Ordinance to ensure that coal production does not stop. The custodian’s role is to act as a trustee or an owner. They can appoint any agency to undertake the mining,” Coal Secretary, Anil Swarup said on Thursday.

He added that the ‘custodian’ will be somebody like an auction winner and the name will be announced in the next few days.

Commenting on the recent decisions of the courts, Swarup said, “The court orders haven’t questioned the Ordinance, only the process followed. So the auction does not face any risk. Internally we are examining whether to appeal the orders at the Supreme Court.”

There are about 10 litigations as of now, which have led to five blocks being removed from the auction pool. These include Sova Ispat dispute on the compensation which has been dismissed, GVK Power’s dispute on compensation where the court has ruled the final auction will be subject to the Court’s decision, a similar case is with Jayaswal Neco Ltd. In the two more cases filed by Bhushan Steel and Power Ltd, Sarada Energy and Mining Ltd, the Ministry of Coal has sought time till March 18.

“Only seven out of the 101 blocks have seen a change in the category of end-use. So there isn’t much to worry about in terms of litigations halting the auction process,” Swarup added.

On the allocation of blocks to the state-owned entities, Swarup said, due to high number of allotment requests received for coal blocks, nine more blocks have been added to the list. State and Central PSUs will now have to put in fresh requests for allotments of the 45 coal blocks being offered to them.

Meanwhile, according to a PTI report, the Delhi High Court has agreed to hear on Friday pleas of Jindal Steel and Power Ltd (JSPL) and Jindal Power Ltd (JPL) against the second Coal Ordinance 2014 provisions regarding determination of compensation payable to prior allottees towards mining infrastructure and land value.

A Bench of Justices Badar Durrez Ahmed and Sanjeev Sachdeva listed the matter for tomorrow after it was mentioned before the court by senior advocate Rajiv Nayar.

The Jindal group companies’ petitions came a day after the high court gave them relief in their first set of petitions in which they had challenged change of end-use of two blocks in Chhattisgarh and Odisha which had been earlier allocated to them.

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