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• In yet another major blow to power-starved Bihar, the Union government has come up with a new policy for allocation of coal blocks to states on a minimum reserve price as against previous practice of giving it free of cost. Under the new policy, only the rich states which could pay huge price would get coal block mines while poor states like Bihar will be deprived of the facility and remain backward in power generation.The coal ministry issued a gazette notification on February 2 which provides procedure for allocation of area containing cost of government companies and the Centre will fix a reserve price for each of the area.

• Even a low reserve price of Rs 250 per MT would mean that for 1000 million MT, a state would need to pay Rs 25,000 crore to get a coal block mine, said Rajib Ranjan, a technocrat and former head of Jharkhand and Chhattisgarh state power boards,.Suspecting a big scam in the coal sector, Ranjan said the private companies were allocated over 11,000 MMT of coal blocks during 2007-09 for free as against only 813 MMT to the government companies. "If each MT of coal costs Rs 800 then each MMT would cost Rs 80 crore. This makes the allocation to the private players to be worth Rs 8,80,000 crore," said Ranjan who is also the JD(U) MLA from Islampur. He said most allotments to private companies were made before the last Lok Sabha elections in 2009.

• Interestingly, despite heavy allocation of coal blocks to private companies, they generated 46,111 MW as on January 12 as against 83,605 ME power generated by the state utilities. "The coal mines should be de-allocated and given to poor states like Bihar," Ranjan said.He alleged that this policy makes a mockery of the government whose companies like Coal India were unable to keep up with the supply of coal to power plants and the item needs to be imported at much higher costs. On the other hand, the average power tariff has increased by over 50% in most states since 2007.

• Ranjan said Bihar had been treated with discrimination and allocated only 266 MMT coal blocks in Urma Pahritora mine in Jharkhand which was found to be of inferior quality and not suitable for power generation. This allocation had been made in partnership with the Jharkhand power board, thus, making Bihar dependent on the neighbouring state. Since 1993 no mine has been allocated to the Bihar power board. "That is the major cause that no power plant could be started in Bihar and the existing public companies are starved of coal," he said.

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