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Govt likely to set up coal regulator before coal mines auction

01 Oct 2013 Evaluate

In order to bring transparency in tainted coal sector of the country, the government may set up proposed coal regulator before the auctioning of coal mines scheduled in January. Earlier, in June, the Cabinet had given approval for the independent coal regulatory bill that needs to be cleared by Parliament before it becomes a law. At present, government is seeking few legal clarifications from the Law Ministry and can issue an executive order soon for immediately set up of a coal regulator.

Meanwhile, the need to set up the regulator was felt long-time back and once the regulator is set up, it will discontinue monopolistic practices of the Coal India. Further, the regulator will have powers to adjudicate on disputes related to price, quality, and supplies and also supervise the supply and demand of coal in the country. Moreover, the regulator will be empowered to resolve disputes including those arising out of fuel supply agreements (FSAs), however, it will not determine fuel rates, a job that will continue to be vested with the producers.

Recently, the government has approved the new methodology for auctioning coal blocks in order to provide upfront and production-linked payments and benchmarking of coal sale prices. The move will ensure greater transparency in auctioning the fully explored coal blocks and will also enable the government to allot coal mining licences through competitive bidding for the first time.

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