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The Coal Ministry is in a fix over the structure of the proposed coal regulator. This follows objections raised by other Ministries like Law and Home, as well as the Planning Commission on the role of the regulator as against the existing Coal Controller.
The Coal Ministry may soon have to firm up its views as the Finance Minister, P. Chidambaram, who heads a Group of Ministers (GoM) deliberating on draft Coal Regulator Bill, has stated that the GoM in its next meeting would finalise the draft and send it to the Cabinet for approval.
The Coal Ministry was asked to re-draft its note on the regulator. “Most of the functions meant for the proposed regulator are currently undertaken by the Coal Controller. So, the question was raised that in such a scenario, what is the need for a new regulator?” said an official privy to the GoM meeting.
For instance, the Coal Controller is the nodal body that grants authorisation for undertaking mining operations and production. It can also suspend or cancel authorisation. The same powers have also been proposed for the regulator.
The Coal Ministry said that the Coal Controller is not an independent body and is a subordinate office of the Ministry. The regulator would be an independent body. This argument was not accepted by other constituents, said another Coal Ministry official.
The Ministry’s proposal for an independent regulator was based on recommendations of several expert committees. The Planning Commission’s Integrated Energy Policy, the Working Group on Coal for Eleventh Plan, the Sankar Committee and the Energy Coordination Committee headed by the Prime Minister suggested the need for setting up of an independent regulatory authority for the coal sector.
Contentious issue
Pricing power to the regulator still remains the most contentious issue. Members of the GoM feel that if the regulator controls price, this would hamper investments. Marketing of coal is de-regulated and no one should regulate price unless few more players come into play.
The nodal Ministry is of the view that if the regulator decides the price it would break Coal India’s monopoly. It will also help to sort out issues such as selling of surplus coal, the official added.
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