New Delhi: In order to attract more bidders for the upcoming coal blocks auction, the Ministry of Power has suggested to its coal counterpart that it should offer at least 20 percent discount on the state-run Coal India's notified price.
According to sources, Power Ministry has made this suggestion on advice from its techno-economic clearance arm Central Electricity Authority (CEA).
CEA, in a presentation to its parent ministry said, a company named EMTA is already selling coal in the open market at 20 percent discount on the Coal India's notified price. Therefore, in order to make the auctions more viable and attractive for the power companies the same discount should be offered by the coal major at the time of auction, it suggested.
Coal India's notified price is normally about 30 percent cheaper than the prevailing international coal prices.
EMTA Group of companies is owned by Ujjal Upadhyay. The company has interests in coal mining and other related businesses.
Coal Ministry will begin auctioning coal blocks in February, next year.
As per the draft rules of bidding for the first set of coal blocks from among the 204 whose allocations were cancelled by the Supreme Court in September, the mines will be allocated only for specified end-use like power generation and there will be a cap on number of blocks a company can bid for.
Government plans to auction 72 coal mines in the first lot. Of these, 42 are ones which are currently under production and where Supreme Court had allowed continuation of operation till March 31.
The remaining are ready to produce.
