The coal ministry has called an inter-ministerial panel meeting on Tuesday to discuss the methodology for fixing reserve price for auction of coal blocks. The panel will comprise secretaries from the ministries of finance, power, steel, law, mines, petroleum, industrial policy and promotion and coal. The committee is mandated to come up with a final formula on the auction start price or reserve price for allotting blocks whose allocation was cancelled by the SC, sources said.
In 2012, the panel had proposed allotting blocks only to government companies or to power plants with tariff-based bidding, to ensure the benefit of cheaper domestic coal is passed on to consumers.
Government sources say that pursuant to the Supreme Court order cancelling 204 blocks, it was felt that the methodology decided by the panel previously needed to be revised. The government is readying to auction 74 blocks in the first tranche that includes 42 operational and 32 nearly-operational mines.
The ordinance promulgated recently lays down rules regarding allocation of cancelled blocks but a decision on formula for fixing floor prices for the blocks has not been finalised yet. The proposal on floor price put forth by the coal ministry suggests different mechanism for different end-users.