In order to implement provisions of the Coal Mines (Special Provisions) Ordinance, 2014 promulgated on 21.10.2014 , the Ministry of Coal has today placed in public domain the draft Rules namely Coal Mines (Special Provisions)Rules, 2014 . Shri Anil Swarup, Coal Secretary while briefing media on various aspects of draft Rules here today  said that in the spirit of transparency in Governance, these Rules are proposed to be placed in the public domain for inviting comments from the public and stake holders before they are finalized. He said comments & suggestions can be sent by email at nomauthority.moc@nic.in by 9 AM , next Monday i.e 24^th November,2014. Shri Swarup stated that these rules provide a detailed roadmap for auction of coal blocks and allotment to Government companies by nominated authority under Coal Ordinance . Efficient utilization of coal assets of the country in the national interest shall be possible through these detailed rules. Shri Swarup further stated that these rules will provide a sense of certainty to the business environment and enhance credibility of the process.

The draft Rules provide for:-

(i)         Appointment and conditions of service of the Nominated Authority, the Commissioner of Payments and the Designated Custodian as well as officers and staff to be engaged in these offices.

(ii)        Engagement of experts by the Nominated Authority. 

(iii)       Process of Allocation through auction and allotment – The Central Government to issue an order to the Nominated Authority specifying which coal mines are to be auctioned and which are to be allotted to the Government Companies. Central Government to also specify the specified end uses for Schedule II & III coal mines and broad parameter for conduct of auction and allotment.

(iv)       Preparation of a ‘Mine Dossier’ by the Nominated Authority for each mine containing the particulars of geographical area, coal reserves, mine infrastructure, approvals, permits, etc. in relation to such mine.

(v)        Conduct of E-auction comprising technical and financial parameters.

(vi)       Graded application fee has been prescribed based on Geological Reserves.

(vii)      Eligibility to bid for Schedule II & III coal mines shall be dependent on the status of preparedness of their end use plant- 80% of investment made in the EUP for Schedule II mines and 60% of investment made in the EUP for Schedule III mines.

(viii)     In case of allotment to Government companies, the progress of development of coal blocks by the applicant in the past, financial and technical capabilities of the applicant, status of preparedness of end use plant, per-capita power availability in the State of the applicant, its current and future requirements etc. will be the factors for selecting the allottee.

(ix)       The Nominated Authority may also specify the maximum number of mines and/or coal reserves that may be allocated to one or more persons.

(x)        The manner of determination of compensation, priority of disbursal of proceeds arising out of land and mine infrastructure, determination of claims and manner of disbursement.

(xi)       Additional levy with respect to the coal extracted till September 24, 2014 shall be deposited by the prior allottee with the Central Government on or before December 31, 2014 and Additional Levy with respect to the coal extracted from after September 24, 2014 till March 31, 2015 shall be deposited with the Central Government on or before June 30, 2015.

(xii)      A successful bidder or allottee may utilize coal mined from a particular coal mine in any of its other similar end use plants by giving a prior intimation to the Central Government in writing and the Central Government may impose such terms and conditions as may be found necessary.

(xiii)     Preparation of a detailed Operation and Management Plan (O&M Plan) by the Designated Custodian for each mines entrusted to it for approval of the Central Government.

 (xiv)    Authorities created under the Ordinance are subject to C&AG audit

Background:

The Hon’ble Supreme Court, vide its judgment dated 25.08.2014 in Writ Petition (Criminal) No. 120 of 2012 (Manohar Lal Sharma vs. Principal Secretary & Ors.) and Writ Petition (Civil) No. 463 of 2012 (Common Cause vs. UOI & Ors.) as well as other connected PILs, has held allocation of coal blocks made through the Screening Committee route and Government Dispensation route as arbitrary and illegal.  Further, the Hon'ble Supreme Court pronounced its order on 24.09.2014 cancelling allocation of 204 coal blocks. Cancellation in case of 42 coal blocks under ‘Producing’ and ‘Ready to produce’ category shall take effect from 31.03.2015.  Remaining 162 coal blocks stood cancelled with immediate effect.

In order to manage and re-allocate 204 cancelled coal blocks as well as to ensure smooth transfer of right, title and interests in the mine along with its land and other associated mining infrastructure to the new allocatee to be selected through an auction or allotment to Government companies, as the case may be, the Government promulgated the Coal Mines (Special Provisions) Ordinance, 2014 on 21.10.2014. 

RM/RS