The Government fell short of its big bang reform for the coal sector by not touching on issues of coal linkages and pooling of fuel prices and just restricting it to e-auction of coal blocks.
The industry was also disappointed as the Government clearly stated that there will be no preferential treatment to existing owners who are set to lose their blocks.
Following the Cabinet decision, private sector power, steel and cement producers remained cautiously optimistic about the benefits the Government’s decision will have on end-users.
While the power sector feels that it is a good move and would help increase supplies, cement producers say the ordinance needs to be studied.
“The move will help increase supplies from undeveloped mines of Coal India. The shortage will go away in the next 2-3 years as private players will bring in new technology,” said Ashok Khurana Director General of Association of Power Producers.
The power sector was also expecting a decision on coal linkages for power plants where no letter of assurance has been signed and linkages aren’t in place.
But the industry was left disappointed.
Meanwhile, Shree Cements said in statement that the company is studying the decision to see the benefits. However, the decision would have been better if trading of coal from the auctioned mines was allowed, the company added.
Fuel supply after March 31, 2015, is becoming a key concern for these sectors.