Revised draft of coal regulator Bill clips power to allocate,price

Even as the debate on the coal block allocation process becomes shriller,the coal ministry has re-written the draft Bill for a regulator for the sector,in which it has refused the proposed watchdog a decisive say in allocation of coal mines and pricing of the fuel.

Written by Priyadarshi Siddhanta | New Delhi | Published: April 25, 2013 1:54 am

Even as the debate on the coal block allocation process becomes shriller,the coal ministry has re-written the draft Bill for a regulator for the sector,in which it has refused the proposed watchdog a decisive say in allocation of coal mines and pricing of the fuel.

While the legislation is intended to make the regulatory mechanism an independent and robust in a sector perceived as murky,the coal ministry has decided to curtail the regulator’s power to “grant of authorisation to avoid conflict with the functions of the coal ministry”.

In the revised draft the Coal Regulatory Authority Bill 2012,the watchdog has been empowered to suggest terms and conditions for opening a mine,but can only recommend cancellation or suspension of a permission to open a mine.

Despite the intent in pushing for the legislation to curb the powers a “monopolistic producer like Coal India”,the latest draft suggests that the regulatory mechanism would be empowered to prescribe only the “principles and methodologies” for pricing coal rather than benchmarking the prices.

This is despite the fact that coal minister Sriprakash Jaiswal had argued on several occasions that a regulator is imperative considering the monopoly producers in the coal industry.

A group of ministers (GoM),which met a fortnight ago to suggest steps on expediting setting up of a regulator,remained indecisive. The coal ministry has told the GoM that all the coal mines in the country were nationalised.

“In these circumstances,the role of the proposed regulatory authority,especially for assuming the executive functions needs to be carefully examined,” the GoM said in its January 21 meeting. The GoM is slated to meet again soon.

If the proposed regulator is disallowed to have a firm say in fixing of coal prices,it would also leave the demand of the power ministry unaddressed in which it had suggested the watchdog be equipped with powers to curb “profiteering” tendencies of coal companies.

For adjudicating the disputes between coal producers and buyers,the revised Bill proposes to empower the Appellate Tribunal set up under the Electricity Act for the purpose.

Unable to arrive at a consensus on the contours of the proposed regulator,the coal ministry was asked to examine whether regulators for sectors like airports or atomic energy could be emulated for coal.

After scrutinising the provisions of the airports economic regulatory authority (AERA) and the atomic energy regulatory (AERB) board the ministry inferred that “the powers and functions of AERA and AERB are non-comparable to the functions of the proposed coal sector regulator”.

WATCHDOG WOES

*The revised draft takes away the power to grant mining leases to avoid conflict of interest with the coal ministry

*The proposed regulator can set terms and conditions for opening a mine but can only recommend cancellation or suspension

*Further,the regulator can set the principles of coal pricing,but cannot determine them

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