In a move that could prevent many state-owned entities from going for public-private joint ventures to develop coal blocks allocated to them, the government proposes to give preference to such entities developing coal mines on their own rather than by forging alliance with the private sector.
?Though the companies would be allowed to form a JV (joint venture) with private companies, the preference would be given to those which apply on thier own or join hands with another PSU (public sector unit) for blocks to be allocated under government dispensation route,? a senior coal ministry official said.
Under the competitive bidding of coal blocks policy, the government has decided to reserve certain blocks to be allocated through special dispensation for government companies. Though these companies can tie up with any private mine developer and operator (MDO), they have to call for bids to select the MDO. The coal ministry official said even in the joint venture, the private player can not have majority stake. ?The private operator can only carry out mining of coal. The propriety right of mined out coal and coal products shall be with the government company,? he said.
The decision to allow public-private partnership even for the reserved blocks is slightly better than the proposal of the steel ministry, which wanted a complete ban on such JVs, fearing a back-door entry of the private sector into commercial mining of minerals such as coal.
The provision, however, would have no impact on the current JVs of companies such as Monnet, Vedanta, Moser Baer, Adani and the Jaypee Group, which have tied up with mining and mineral corporations of Jharkhand, Chhattisgarh, Orissa and Madhya Pradesh for coal blocks allocated to these state entities. ?All the terms and conditions would be effective prospectively,? the coal ministry official said.
The proposed competitive bidding of coal blocks is a part of new MMDR Bill cleared by the group of ministers headed by then finance minister Pranab Mukherjee in July last year. The Cabinet gave its green signal and the Bill was tabled in Parliament. Now, the draft Bill is with the standing committee.