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Dec 21, 2012, 06.26 PM IST | Source: PTI

Environment clearance issue for coal blocks to be examined

The Ministry of Environment and Forest (MoEF) has assured the Coal Ministry that it would examine the issue of whether in-principle environment and forest clearances can be granted to coal blocks that are to be put up for auction.

The Ministry of Environment and Forest (MoEF) has assured the Coal Ministry that it would examine the issue of whether in-principle environment and forest clearances can be granted to coal blocks that are to be put up for auction. Senior officials of coal ministry met top officials of Environment Ministry in this regard here and discussed at length the issue of such clearances to mines that are to be auctioned.

"During the meeting the issue of whether to grant in-principal environment and forest clearances to coal blocks to be put for auction was discussed. The Environment Ministry during the meeting assured the Coal Ministry that it would examine the issue," sources close to the development said. The Coal Ministry had earlier expressed hopes that the differences with ministries like environment and power on the proposed bidding norms for auctioning of captive coal blocks would be resolved soon.

The unresolved issues include whether to provide an "in principle" environment clearance to the blocks on offer, arriving at a benchmark floor price and offering discounted prices to sectors like power, Coal Secretary S K Srivastava had said. The Coal Secretary had said some ministries are in favour of putting up the blocks for auction with certain clearances like environment but that it may not be feasible due to procedural reasons.

"We are in touch with MoEF on whether there can be a thing like conceptually providing in-principle approval, which I feel may not be possible considering the processes which are to be involved. We are to still arrive at a final view but few of the ministries have said that blocks have to be given with clearances," he said and adding this "requires lot of deliberations".

While environment clearance is given by Ministry of Environment and Forests (MoEF), forest clearance are provided by respective state governments. Amid alleged irregularities in allocating coal blocks to various firms for their captive consumption in the past, the government had decided to allocate such blocks through auction route only.

Later it identified 54 such blocks for auction and asked Crisil to provide a report on the methodology to determine the reserve price for bidding of the blocks. Crisil, which submitted its report in October, has reportedly suggested preparing a robust feasibility report of all the 54 blocks and using Discounted Cash Flow (DCF) method for valuation of the blocks. The government auditor CAG in its report this year had said financial gains of Rs 1.86 lakh crore could have accrued to the government had it auctioned the 57 coal blocks that were allocated to private firms between 2004 and 2009.

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