The coal ministry wants the surrendered portions of blocks to be transferred to Coal India (CIL) although the latter is yet to take a call on it. Last year, the ministry allotted to state-owned firms 19 blocks, of which 15 were given to power PSUs, three to mining PSUs and one for underground coal gasification. Some blocks were jointly allotted to multiple state PSUs for developing and lifting their share of coal. However, some allocatees surrendered their share of the block for reasons like CBM overlapping, or the block falling within the animal reserve area.

The ministry, in a recent meeting headed by additional secretary, coal, AK Dubey, took the final decision of not putting up the surrendered portion of a block for auction as this would bring two types of allocatees, covered by two different sets of rules, on the same block. Hence, transferring the surrendered portion of a block to CIL is the only viable way out, a coal ministry official said.

CIL chairman S Narsing Rao told fe that even as the ministry was deliberating on the issue, nothing official was communicated to the company so far.

?CIL would only take a call after the ministry made an official communication,? Rao said.

CIL will have to take the issue to the board before it can take a final decision, added a CIL official.

According to the ministry official, CIL will be given the choice to either pick up coal in proportion to the surrendered area of the block, or invest as a partner. If it chooses the first option, the surrendered portion of the block will be handed over to the co-existing allocatee for development. The coal mined from the surrendered portion will be given to CIL at a transfer price fixed by the government.

However, a CIL director said on the condition of anonymity that taking coal at the transfer price won?t be a good option, and investing in the block as a lead partner will be more viable. But much would depend on the existing co-allocatee ? it would be its prerogative to accept CIL as a lead partner.

However, a section of CIL officials feels that getting the surrendered portion of the blocks would be a shot in the arm for the company as it would help narrow down the demand-supply gap. The Centre has already asked states to hand over surplus coal from captive mines to CIL if a joint allocatee fails to set up end-use plants. The coal ministry?s decision to rope in CIL for utilising the surrendered portion of a block has been in line with the Centre?s decision.

However, a CIL official said that if the company were to take over a block, it would have to scrutinise the reason for surrender ? if a block falls under the animal reserve area, CIL will face the same problem as the allocatee. CBM overlapping can be addressed by CIL, the official said.