Union Coal Ministry pooh poohs PM’s assurance, puts up SCCL blocks for auction

The move is in blatant contradiction to the assurance made by Prime Minister Narendra Modi during his visit to Ramagundam last month

Hyderabad: The State’s apprehensions over the Centre’s conspiracy to privatise Singareni Collieries Company Limited (SCCL) has come true with the Ministry of Coal putting coal blocks under the SCCL limits at Penagadapa, Sattupalli Block-III, Sravanapalli and Kalyanikhani Block-6, for auction during an investors’ conclave at Bengaluru on Saturday.

The move is in blatant contradiction to the assurance made by Prime Minister Narendra Modi during his visit to Ramagundam last month, when he announced that there was no proposal to privatise SCCL. More importantly, he had said that with the State holding a 51 percent share in the company as against the Centre’s 49 percent, no major decision could be unilaterally taken by the Centre.

Less than a month later, the Centre has gone back on these words by deciding to put up coal blocks under SCCL limits on auction, despite the State’s stringent opposition.

The Ministry of Coal had organised an investor conclave in Benguluru on commercial coal mines on Saturday for auction of 133 coal mines, including the four blocks of SCCL. These coal mines are from Andhra Pradesh, Arunachal Pradesh, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Tamil Nadu, Telangana and West Bengal.

The Saturday meeting was chaired by union Coal Minister Pralhad Joshi. The Ministry of Coal had already organised such conclaves at Indore and Mumbai. The sale of tender documents commenced on Saturday and the details have been put up on the Centre’s MSTC auction platform.

Until recently, the coal blocks were offered to coal companies on nomination basis by the Centre. The State government’s recommendations were also considered in this regard. However, now, the Centre is conducting open auction of the coal blocks, in which private players can also participate, and which in turn means, SCCL will have to compete with major players for taking up mining operations in these blocks.

The auctioning of the four coal blocks, according to sources, would have an impact on not only the overall production of the SCCL, but also in terms of business as the new player, trying to gain an upper hand and make profits, would try to sell the coal at prices lesser than public sector units like the SCCL, and much lower than what it was actual worth of. PSUs like SCCL would eventually be forced to shut down after running in huge losses. Among the four blocks up for auction, the loss of Sattupalli Block-III would have a major impact on SCCL, sources say.

According to SCCL employees unions, this was actually the Centre’s ploy to push the company into losses. The SCCL had already spent huge amounts on the study of the availability of coal in these coal blocks.

The Telangana government has in fact been appealing to the Centre for almost a year now against such auctions.

Chief Minister K Chandrashekhar Rao had written to the Prime Minister on December 7, 2021, pointing out that SCCL was playing a key role in meeting the coal requirements of thermal power stations in Telangana, Andhra Pradesh, Maharashtra, Karnataka and Tamil Nadu, by producing 65 million tonnes of coal per annum. There was the need for uninterrupted supply of coal to various thermal power plants in Telangana in the wake of increased power consumption in the State, he said, requesting to withdraw coal blocks of SCCL from the auction.

Auctioning these, Chandrashekhar Rao had said, would have an adverse impact on the coal demand in the Singareni area.