New Delhi, March 20 (IANS): With the coal ordinance permitting auction of cancelled blocks due to lapse early April, the Rajya Sabha on Friday passed the Coal Mines (Special Provisions) Bill, 2014, in the nick of time before parliament goes into its scheduled month-long recess.

Failure to pass the bill, already cleared by the Lok Sabha, would have put into jeopardy the status of mines already auctioned, which has yielded revenue of more than Rs.200,000 crore from winning bids.

The Coal Mines (Special Provisions) Bill, 2015, provides for allocation of coal mines and vests the right, title and interest over mine infrastructure together with mining leases to successful bidders through a transparent bidding process.

The bill will now replace the ordinance which outlines the procedure for auction of coal blocks that were cancelled by the Supreme Court in September.

The Bill also provides for allotment of blocks to public sector undertakings. As per rules the auctions are being conducted under tariff based reverse bidding where the
end-use is power generation, and forward bidding for production of steel, cement and generation of power for captive use.

While the criteria for calculating the floor price for bidding is based on state miner Coal India's (CIL) price of coal of the same grade, the auction would also have a ceiling price for power sector bidders to keep the lid on power tariffs.

The floor price would not be less than Rs.150 per tonne, while potential bidders would have to pay upfront as floor price is 10 percent of the intrinsic value of the mine. The bidder with the highest floor price would be the preferred bidder.