Ministerial group likely to meet on Tuesday to discuss revised draft

The Union Coal Ministry has diluted the pricing power that was earlier proposed to be given to the Coal Regulator. The move by the nodal ministry comes after a Group of Ministers raised concerns during its first meeting on July 25.

What this means is that now the Ministry’s functions will be preserved and there will no longer be any overlaps with the Regulatory Authority.

“After re-defining the objectives of the Coal Regulatory Authority, it has been decided that the Regulator would prescribe the principles and methodology required for pricing determination, with the approval of Government,” a senior Coal Ministry official told Business Line.

Meeting due

Earlier, it was proposed that the Regulator would ‘determine the price of raw coal and washed coal and any other by-product generated during the process of coal washing.’

The GoM headed by Finance Minister P. Chidambaram is likely to meet on December 18 to deliberate on the new draft for the independent regulatory authority for the sector.

In addition, the Coal Ministry has kept with itself the power to grant permission for opening a coal mine or cancelling it. Also, the Regulator would not overlook the laws administered by the Ministry of Labour, Mines, and Environment and Forests.

The Ministry has not decided on dismantling the Office of the Coal Controller. As such, the approval for coal mining would continue to remain with the Coal Controller. The regulatory authority would have to specify the terms and conditions and make them part of the permission granted by the Coal Controller.

The GoM had said that the Regulatory Authority should have the provision to counter the methods and practices followed by the monopolistic producer (Coal India Ltd). There were also repeated complaints by the buyers.

Therefore, the Coal Ministry has decided to empower the Regulator with the authority to approve methods of testing, sample collection and weighing.

“To counter the practices and methods of the monopolistic producer, it would essentially require some control on the quality of coal supplies and a rational approach to price fixation,” said the official.

(This article was published on December 16, 2012)
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