NEW DELHI | Apr 07, 2015: The coal ministry is mulling over a proposal to provide coal blocks to state entities for commercial mining to fulfill the requirement of small scale industry (SSI). Besides, the ministry is also considering a proposal to allocate a coal block to the Delhi government in the next round of auctions starting third week of April.

Anil Swarup, coal secretary told Express, “Our next step is to provide mines to state entities for commercial mining to fulfill the requirement of small scale sector. We are also going to consider the application for Delhi government in the next round of auction.”

This comes after capital’s major discom Tata Power Delhi Distribution Limited writing to the power and coal ministries suggesting ways of reducing electricity tariff by almost Rs 2.70 per unit. Tata Power has suggested to allocate a coal block for Aravali power plant.

Reserve bidding for the power sector ensures that auction process does not lead to increase in tariffs. The bidder has to bid below the ceiling of the coal price, which is factored in the existing tariff.

Elaborating on the suggested steps, Tata Power said, plants like NTPC Badarpur, Dadri, NTPC gas-based plant at Dadri and Auriya, and power generation companies such as Rajghat coal based plant and Pragati Power are ‘very old’ and have high variable cost.

“Moreover, gas from Delhi gas turbine and Pragati plant can be reallocated to Bawana gas plant so that it operates at full capacity,” the letter said.

204 more coal blocks to be auctioned
The coal ministry is considering allowing commercial extraction of coal in mines that are already with state governments. The government is in the process of alloting 204 coal blocks in a transparent manner through auctions that would enable the states to garner revenues. So far, the government has managed to garner around Rs 4 lakh crore from the 67 coal blocks auctioned.

(Source: http://www.newindianexpress.com)