NPV of Coal Blocks may be set at twice the domestic price

The government is likely to set the benchmark for determining net present value of coal blocks earmarked for auction at double the price of domestic coal, according to a senior official. This assumes importance as 90% of net present value (NPV) of a tonne of coal will be the floor price for auctioning the blocks and 10% of the total NPV of the block will have to be paid up- front by the highest bidder. NPV is the current valuation of future earnings from a coal block.