Coal ministry to seek Cabinet nod for regulator

The coal ministry will soon seek the Cabinet’s approval for setting up a regulator for the sector.

The coal ministry will soon seek the Cabinet’s approval for setting up a regulator for the sector. If given the go-ahead, it will end state-run giant Coal India Limited’s (CIL’s) power in deciding prices of the fuel.

“The Ministry has prepared a Cabinet note and has circulated it to concerned departments. After incorporating their views, a final note will be placed before the Cabinet,” a senior Coal Ministry official told The Indian Express. A blueprint for the Coal Regulatory Authority Bill, 2008, is in the works, and will likely be tabled in the coming session of Parliament, he said.

“The regulator will primarily look at price determination, monitor fuel supply agreements (FSAs) and disputes pertaining to the FSAs. It will also have a substantive say in recommending de-allocation of coal blocks lying idle despite being allocated years ago,” sources in the ministry said.

The regulator will be duly empowered to take punitive action against violation of norms and standards set by it for proper growth of the sector, considered key to the growth of the thermal power sector. “The proposed regulator will not weaken the prospects of CIL,” the sources said, adding the PSU itself has endorsed it.

“It will help in better price realisation. The regulator will create a level-playing field between the private and the public sector by preventing under pricing. Besides this, creating identical social and environmental sustainability conditions for the private and the public sector will help CIL engage in more underground mining activity,” they argued.

In his Budget speech for this fiscal, finance minister P Chidambaram had announced setting up a regulator for the coal sector. In its Integrated Energy Policy, the Planning Commission too had pitched for a coal sector regulator.