Montek moots PPP for mining Coal India blocks

* Private players can boost production,Plan panel tells Jaiswal

Written by Priyadarshi Siddhanta | New Delhi | Published: April 10, 2012 1:11 am

Planning Commission Deputy Chairman Montek Singh Ahluwalia has asked Coal Minister Sriprakash Jaiswal to enlist private mine developers expeditiously to explore Coal India Limited’s (CIL) mines through the Public Private Partnership (PPP) route. Pitching for devising a transparent mechanism for fair selection of the private companies,Ahluwalia has offered the Plan panel’s expertise since it has assisted other infrastructure ministries in drafting model concession agreements.

According to Ahluwalia,the idea was explored following his meeting with the Prime Minister and a discussion with Coal Secretary Alok Perti later. The coal ministry has now begun exploring the possibility of framing an agreement to rope in Mine Development Operators (MDOs),under which they would be entrusted to conduct exploratory drillings “on the basis of agreed costing” to be determined through competitive bidding. “I think this is a very valuable initiative at a time when it is of utmost importance that we increase domestic coal production. Since PPP has been used extensively in other areas and the country has been able to mobilise the highest investment among all developing nations,it should be emulated in coal mining operations too,” Ahluwalia wrote in his March 21 letter to Jaiswal.

The Plan panel deputy chairman told Jaiswal that while framing a PPP agreement,his ministry should devise a transparent and competitive mechanism for selecting the MDOs and also ensure that “the contract would allocate risks and rewards in the most optimal manner and to the best advantage of CIL.”

Instead of leaving the matter entirely to CIL,Ahluwalia said the ministry may follow the practice of PPP projects wherein the administrative ministry prepares a model concession agreement,which is vetted by an inter-ministerial group and thereafter approved by the Union Cabinet. “This model can take into account the experience gained in different sectors and the lessons that have emerged so far,” the deputy chairman said in his letter.

The UPA government had earlier tried to introduce commercial mining of coal by seeking to amend the Coal Mines Nationalisation Act 1973 and had even introduced a Bill to this effect in Parliament. But in the wake of stiff opposition from the CPI-M and other left parties,the Centre finally withdrew. The Coal Bill 2000 is pending in the Rajya Sabha ever since. Since CIL is headquartered in Kolkata,Mamata Banerjee-led Trinamool Congress government in West Bengal is also unlikely to take any such move kindly.

Opening up

* Planning Commission Deputy Chairman asks the Coal Minister to enlist private mine developers to explore CIL mines through PPP route

* Offers Plan panel’s expertise since it has assisted other ministries in drafting model concession agreements

* Says PPP has been used extensively in other areas and the country has been able to mobilise the highest investment among all developing nations

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