Growing wise from 2G fiasco, it looks at mega power projects model

Learning from the recent flop-show of the 2G telecom spectrum licence auction, a view is firming up within the Government that coal blocks should be auctioned only after environment and forest clearances are obtained.

Blocks loaded with ‘in-principle’ clearances would fetch a better floor price, as getting the green nod is a major roadblock in exploiting mines, sources said.

Coal Secretary S. K. Srivastava said that one of the issues to be sorted out before 54 mines go on auction is ‘whether they should be put out with or without environment and forest clearances.’

In-principle approval

“We will take it up with Ministry of Environment and Forests (MoEF),” Srivastava told Business Line.

Environment clearance is offered by the Centre, while forest and land acquisition rights are taken from the States.

Obtaining green clearances and then going for auction may, however, lead to delays in the bidding process.

“Till now, there is no provision for in-principle approval by the MoEF,” a senior Coal Ministry Official working on the auction process said.

Pointing out that 90 per cent of allocated coal blocks are awaiting green clearances, the official said: “The States have said they will ‘assist’ in the process. But we need proper norms for this.”

For instance, currently, Coal India has 178 projects awaiting forest clearance from several States.

And 65 more applications are pending with the MoEF.

The Coal Ministry may look at a model similar to the one governing the bidding for ultra mega power projects. Power Finance Corporation Limited (PFC), the nodal body that conceives of and plans the mega power projects, gets green clearances before the unit is put out for bidding.


The Coal Ministry is tightening guidelines for the States while allocating coal mines via Government dispensation route, Srivastava said.

This is because Government companies need not participate in the auctions. The Secretary said that States such as Orissa and Jharkhand have also sought preference for end-use plants being set up in their respective States.

The Ministry is expected to keep a strict watch on joint ventures being floated by State enterprises for end-use of coal from captive mines.

The Planning Commission, in its comments on the coal block auction process, has also questioned special treatment for Government firms.

(This article was published on November 18, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.