New Delhi, October 20
Nearly a month after the Supreme Court cancelled the allocation of 214 coal mines, the NDA government today decided to bring an ordinance to enable reallocation of coal blocks.

The ordinance will enable the government to acquire land of these mines along with plants for auction later. The decision was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi today. Addressing the media after the meeting, Finance Minister Arun Jaitley said the state-run companies and PSUs would be allocated coal mines on priority. The process to allocate coal mines to private sector would be completed over the next three-four months through e-auction, he said.

This would allow the government to complete the process of reallocation of coal blocks much before the stipulated time as given by the Supreme Court. The ordinance has been finalised and notified after the the Cabinet approval. The measure has been designed to deal with implications of the Supreme Court’s order in the coal case.

The apex court had last month quashed the allocation of 214 out of 218 coal blocks allotted to various companies since 1993 terming the method as “fatally flawed”.

Jaitley said actual users of mines in the private sector would get the mines through e-auction, the process for which would be completed in three-four months.

The Finance Minister said sufficient mines would be put in the pool for e-auction so the actual users go back to mines at the earliest and the power, cement and steel sector does not suffer due to coal shortage.

In a move that would help financial empowerment of states, the Union Government has decided that the proceeds from the e-auction would be given to state governments where the mines are located. This means that Jharkhand, West Bengal, Chhattisgarh and Odissa will benefit from e-auction.

The Coal Ministry has drafted the ordinance after consultations with attorney general Mukul Rohatgi.

Jaitley said the working and structure of the world’s largest coal producer, Coal India Ltd, would not be disturbed and commercial users of mines in future would be decided by the government so there is no further “mess” in the allocation of mines.

Sources said successful bidders in the fresh auction of coal blocks along with the land and plant standing on it would be liable to pay the earlier allottees the cost of the land and the plant along with 12 per cent annual interest on the amount that was originally invested for purchasing the land and setting up plant.

Also, all allottees whose blocks were cancelled by the Supreme Court would be eligible to participate in the fresh auction, barring those convicted in coal related cases, sources added.