Govt bars state corporations from floating private JVs for coalmine development

NEW DELHI: Government companies will not be allowed to form joint ventures with private firms for developing coal blocks. The companies can, however, appoint private mine development operators through a transparent competitive bidding process.

A senior coal ministry official said that the decision was aimed at restricting private participation in commercial coal mining.

" State governments forming joint ventures with private entities and diverting coal to them has become a common scene. We have amended the guidelines for coal block allocation to government companies to make them more stringent. The decision would be communicated to the states soon," he said.

Also, state-run power companies like NTPC will be allotted coal blocks only if they sell power at competitive rates to state electricity distribution companies. The coal ministry official said the move would ensure low electricity tariffs.

The conditions would not apply on government companies if they bag coal blocks under auction. The coal ministry has identified 54 coal blocks for allotment of which 16 have been reserved for allocation to central and state government companies under government dispensation route.

The public sector undertakings will be asked to pay a reserve price for each allocated mine.