Ministry sets the ball rolling on policy for surplus coal

Siddhartha P. Saikia New Delhi | Updated on March 12, 2018

The Coal Ministry has started a fresh round of discussions with ministries including Power and Steel on the surplus coal policy that has been kept on the backburner for the past two years.

The policy is aimed at determining the mandate for the use of excess coal from captive mines. According to the Coal Mines (Nationalisation) Act 1973 that oversees captive mining, all coal mined from the block must be used entirely for the respective end-use project.

The Cabinet Secretariat advised the Coal Ministry to start the process afresh and take the policy to the Cabinet for its consideration , a Government official privy to the development told Business Line.

Earlier, when the policy was floated, the Prime Minister’s Office sounded a note of caution and directed the nodal Ministry to put it on hold.

Also, the Law Ministry expressed objections over diversion of excess coal from mines attached to Ultra Mega Power Projects (UMPP). The Coal Ministry feels that excess coal, if any, should be given to Coal India or its subsidiary at a notified price.

However, several private companies approached the Government for using excess coal for other projects. For example, Reliance Power had received the Government’s approval to use excess coal from attached mines in Sasan Ultra Mega Power Project (UMMP) for another of its project.

In August 2008, an empowered Group of Ministers (eGoM) decided to allow Reliance Power to use excess coal from the Sasan Project for its Chitrangi project in Madhya Pradesh.

On, April 28, 2012, the issue came up again and the eGoM reverted to its earlier stand and did not review it.

However, the Comptroller and Auditor General of India (CAG) in one of its report questioned the special dispensation to Reliance Power.

The Government has also constituted a panel headed by Planning Commission member B. K. Chaturvedi to look at ‘coal banking’.


Published on August 28, 2013

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