The coal ministry has decided against forming any independent body to resolve disputes and decide penalty in matters related to coal mines that have been auctioned or allotted under Coal Mines (Special Provisions) Act, 2015.
In July this year, a High Power Expert Committee (HPEC) recommended that decision on penalty “may be entrusted to an independent body of Independent External Monitors (IEMs) consisting of experts in fields of mining, law and administration”.
The HPEC also recommended that the decisions of the committee of IEMs on “deviations or non-compliance with efficiency parameters, penalties would be binding on the nominated authority (NA)”. The NA is generally an officer of the Coal Ministry — not below the rank of Joint Secretary — to conduct auction of coal mines or allot coal mines as per Coal Mines (Special Provisions) Act, 2015.
After studying the recommendation of the HPEC, the Coal Ministry had stated in its preliminary opinion that this recommendation should not be accepted as the Act provides for the NA to perform such functions based on the recommendations of a duly constituted scrutiny committee.
“At present, NA works on additional charge basis by one of the joint secretaries of Ministry of Coal. The need is to strengthen the NA by way of: appointment of a full time NA; strengthening its office with experts from field of finance, law, mining etc,” the Coal Ministry stated in its preliminary opinion.
This preliminary opinion was sent to a committee of secretaries (COS), which agreed with Coal Ministry’s viewpoint. Therefore, the Coal Ministry, in its final opinion, decided to not accept the HPEC recommendation regarding formation of independent body to decide on penalty and disputes.
So far, four tranches of auction have been conducted for specified end-users such as power and non-regulated sectors with the fifth one exclusively for the iron and steel sector.
However, these, too, have not had much success after the initial first two rounds. “… After significant success of Tranche 1 and 2 of coal mines auction, the interest of the bidders in Tranche 3, 4 and 5 have been dismal so much so that Tranche 4 and 5 had to be cancelled owing to insufficient number of bidders,” stated the Coal Ministry’s proposal to COS.
Following directions by Prime Minister at a meeting last November, the HPEC was formed under the chairmanship of former CVC Pratyush Sinha to “examine efficacy and challenges in the current bidding system and suggest changes for conducting auction of coal mines in future”.