Coal Ministry finalising blueprint for regulator

To ensure fair growth and enable the coal sector meet future challenges, the government is finalising the blueprint...

To ensure fair growth and enable the coal sector meet future challenges, the government is finalising the blueprint for a regulator and will place a proposal before the Cabinet within the next three months. Once the Cabinet clears it, a Bill would be tabled in Parliament.

The regulator would ensure a transparent pricing mechanism and also check the process of coal block allocation, Coal Ministry officials said. The Ministry would soon engage with the brass of Coal India Limited (CIL) and its subsidiaries and take note of their suggestions before formally seeking a Cabinet approval. “This is imperative since they are the key players in the sector,” an official said.

The debate on the need for a coal regulator has been on for some time. Suppliers and consumers have been at loggerheads on whether there should be a regulatory mechanism for pricing. Those in favour say there is a case for regulation of coal block allocation process and rendering it objective and transparent.

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At present, 94 per cent of production comes from state-owned companies, while private sector participation is limited to captive mining. To tide over the coal shortage, the Ministry began e-auctioning to potential buyers, but later reverted to e-booking given fears it could lead to carterlisation among big players.

Even the Planning Commission has pitched for an independent regulator that would identify and allocate coal and lignite blocks for exploration and mining, evolve a transparent mechanism for trading margins, recommend steps for fixing prices, protect the interests of consumers and ensure smooth e-auctions.

CIL, however, is not quite amused with the idea of a regulator. Its CMD Partho S Bhattacharya said his company expected a level-playing field between private and public sectors by preventing under-pricing of coal, terms and conditions for pay and most importantly wages and environment and social sustainability of mining activities. “Correct pricing of coal and social and environmental sustainability conditions for private and public sector will help CIL engage in more underground mining activity,” he said.