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PlanComm pitches for opening coal mining for private sector

CAG estimates financial impact of benefit to private allottees of coal mines will be Rs 1.86 lakh cr.

Written by Agencies | New Delhi | Published: September 18, 2012 6:01:25 pm

Planning Commission on Tuesday pitched for privatisation of coal mining saying the government should have a consistent policy for energy sector as third party sale is allowed for petroleum and natural gas in the country.

“The policy for energy sector should be consistent. We have not nationalised petroleum and natural gas. Private sector investment for third party sale is freely allowed in oil and natural gas.

“Therefore to my mind,the logic is very clear that it should be allowed (for coal),” Planning Commission Deputy Chairman Montek Singh Ahluwalia said on the sidelines of SKOCH Summit.

“Politically whether that is feasible or not,that is for the government and political managers to decide. Economically,it is impossible to take any other view,” he said adding that petroleum and natural gas are much more valuable resource than coal and these are cleaner and more expensive globally.

In the present scenario,the third party sale of coal is not allowed and coal mines were permitted to be allocated for captive use after the sector was nationalised in 1970’s.

CAG had recently estimated that the financial impact of the benefit to the private allottees of coal mines will be about Rs 1.86 lakh crore.

The CAG in its report,tabled in Parliament,names 25 companies including Essar Power,Hindalco,Tata Power and Jindal Steel and Power which have got the blocks in various states.

The auditing body said it is “of strong opinion that there is a need for strict regulatory and monitoring mechanism to ensure that benefit of cheaper coal is passed on to consumers”.

The government is yet to finalise the modus operandi of competitive bidding for coal blocks.

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