Coal cop on agenda

The government is mulling a coal regulator to oversee the sector and possibly indicate pricing norms as well as act as an arbitrator between the coal players and the government.

By Jayanta Roy Chowdhury
  • Published 9.03.18
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New Delhi: The government is mulling a coal regulator to oversee the sector and possibly indicate pricing norms as well as act as an arbitrator between the coal players and the government.

An earlier Coal Regulatory Authority Bill introduced by the Manmohan Singh government in 2013 was allowed to lapse.

However, a note by the coal ministry, recommending its revival, states "the issue of Coal Regulatory Authority has to be examined keeping in view the legislative developments that took place after the cancellation of the coal blocks allocated through the screening committee route since 1993 by the Hon'ble Supreme Court in 2014".

India has long been debating an independent coal regulator as there are now multiple players in the sector, requiring an entity to oversee affairs.

Besides, the single monopoly producer - Coal India Ltd (CIL) - many other firms have been given captive blocks and some have been allowed to trade surplus production.

There have been complaints of mis-pricing and the abuse of monopoly power by CIL and countercomplaints of being armtwisted by the government to favour private buyers.

"The issue which the government needs to thrash out before it decides on the coal regulatory authority is whether the regulator will have the power to fix coal prices or simply act as an arbitrator, leaving pricing to market forces and stepping in only when there are cases of predatory pricing or under-pricing to deprive states of royalty or abuse of monopolistic power," officials said.

The regulator is being thought of as coal mines are now being auctioned in a manner similar to telecom airwaves, and there is a need for an entity who can arbitrate in disputes between the state and miners as well as between rival miners instead of clogging up courts with cases.

The original bill wanted to set up a coal regulator, to be funded through a Coal Regulatory Authority Fund, who would also advise the government on issues such as the auction of coal blocks, though the government will have the right to actually conduct the auctions and take its proceeds.