News Brief | January 2015
Coal rules can be misread | Experts
After the Coal Bill, it is the turn of the Coal Mines (Special Provisions) Rules, 2014. Rules say the central government can allot a coal block where mining has already started to any company recommended by the ministry of power which ´henceforth may be awarded a power project based on competitive bids for tariff´.
The phrasing, say industry experts, creates an outcome where companies become eligible for an allotment even if they just intend to bid for a power project. This clause had been inserted to facilitate tariff-based bidding for integrated projects like UMPPs (where the coalblock is bundled with the power supply bid). However, critics felt it would also result in an outcome where politically-connected companies, confident of getting cheap coal through a block allocation, would bid much lower than others for power projects.