The Environment Ministry has turned down the Coal Ministry's request for grant of "in-principle" clearances to mines identified for auction, raising doubts over proposed competitive bidding for captive blocks.

"The Environment Ministry has said that in-principle environment and forest clearances to mines to be auctioned cannot be accorded as it is legally not enforceable," a source in the Coal Ministry said.

The Coal Ministry had earlier expressed the hope that differences with various ministries on the proposed bidding norms for auctioning of captive coal blocks would be resolved.

The unresolved issues include getting "in-principle" environment clearance to the blocks on offer, arriving at a benchmark floor price and offering discounted prices to sectors like power, Coal Secretary S K Srivastava had said.

The Coal Secretary had said some ministries are in favour of auction after getting certain approvals, like green clearances, for the mines to be sold. However, it might not be feasible due to procedural reasons, he had said.

"We are in touch with MoEF on whether there can be a thing like conceptually providing in-principle approval, which I feel may not be possible considering the processes which are to be involved. We are to still arrive at a final view but few of the ministries have said that blocks have to be given with clearances," he had said. This "requires lot of deliberations" he had said.

While environment clearance is given by MoEF, forest clearance is provided by respective state governments.

Amid alleged irregularities in allocating coal blocks to various firms for their captive consumption in the past, the government had decided to allocate such blocks through auction route only.

Later it identified 54 such blocks to be alloted both through auction and government dispensation route and asked Crisil to provide a report on the methodology to determine the reserve price for bidding of the blocks.

Crisil, which submitted its report in October, had reportedly suggested preparing a robust feasibility report of all the 54 blocks and using Discounted Cash Flow (DCF) method for valuation of the blocks.

The government auditor CAG in its report had said financial gains of Rs 1.86 lakh crore could have accrued to the government had it auctioned the 57 coal blocks that were allocated to private firms between 2004 and 2009.