Coal blocks to be auctioned in 3 months, says Finance Ministry official

The government will conduct auction of the coal blocks, which were recently cancelled by the Supreme Court, in three months time, a top Finance Ministry official said on Friday.

"They (coal blocks) are being put to auction in the course of next three months, this is what the Power Ministry has informed (us)...," Financial Services Secretary GS Sandhu told reporters in the national capita.

Sandhu was speaking to reporters post a meeting with bankers and private power companies to find ways to solve the coal stock shortage issues concerning power producers.

The Financial Services Secretary said a small group was constituted on Friday under the chairmanship of IIFCL head Santosh Nayyar so as to suggest ways to sort out financing issues in the power projects, which are held up on account of fuel supply constraints.

"The committee will submit its report on November 7. We have discussed about gas based, coal based power projects and projects which are held up because of last mile financing... We have constituted a small group headed by the CMD, IIFCL, Santosh Nayyar to examine all these issues," he said.

In a ruling in late September, the apex court had quashed allocation of 214 out of 218 coal blocks allocated to various companies since 1993, terming the process as fatally flawed. Following cancellation of these coal blocks, the SC had allowed the Centre to take over operation of 42 such blocks which were functional.

The court had said that the beneficiaries of the illegal process must suffer the consequences and refused to show sympathy to private companies, which had submitted that Rs 2.87 lakh crores had been invested in 157 coal blocks and Rs 4 lakh crores in end-use plants.

Investments worth as much as Rs 5 lakh crore are stuck in power projects on various reasons including fuel shortage. During the meeting, power producers made a detailed presentation to highlight the issues concerning the sector.