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Govt may privatise coal, expedite auction of mines

business Updated: Aug 27, 2014 00:27 IST
HT Correspondent

The NDA government may have to expedite the implementation of the coal auction policy approved by the UPA government last year to prevent projects from getting stuck for want of coal. The Centre is also likely to fast-track a Bill to remove restrictions on private companies in coal mining.

Read: Verdict may hit economy, hard, says law minister

The Cabinet had, in September 2013, okayed a policy to give coal-mining licences to private companies through competitive bidding.

The Coal Nationalisation (Amendment) Bill was introduced in the Rajya Sabha on April 24, 2000 to amend the Coal Mines Nationalisation Act, 1973 and has been pending since then. The Bill would enable domestic private companies to mine coal without the existing restriction on captive mining.

At present, private companies can mine coal only to feed their own power plants.

One of the hurdles to the Bill’s passage was opposition from trade unions.

This time, the unions are likely to brought on board, a senior coal ministry official said.

“It may be taken up in the winter session,” a former coal secretary said.

For allocation of coal blocks through auction, the coal ministry under the UPA government had engaged M/s CRISIL Infrastructure Advisory through the Central Mine Planning & Design Institute Ltd as a consultant to suggest the methodology for fixing floor/reserve price, model tender document and draft agreement to be entered into with successful bidders. The report submitted by M/s CRISIL was examined by an inter-ministerial committee (IMC), which was set up to examine the issue. “The suggestions can be dusted out, since they are still relevant,” the former coal secretary added.

Read:Power projects could be worst-hit by SC ruling

An expert committee set up to develop a road map for coal sector reforms headed by TL Shankar in 2005, had raised some important issues on the pricing of national assets such as coal and other natural resources and in the sharing of “economic rent”.

Economic rent is the difference between the cost of production within the country and the international price of the same commodity.