India’s coal block auction in bind over coal sector regulator
KOLKATA (miningweekly.com) - India’s maiden auction of coal blocks, scheduled to take place within the next three months, has been caught in a bind on whether the bidding would be preceded by the establishment of a coal sector regulator.
According to a Coal Ministry official, the government would ideally like to have the Coal Regulatory Authority of India in place to ensure transparency in the sector, but it was proving difficult to reconcile the urgency of completing the auction with slower Parliamentary procedures, which had to be adhered to in setting up a regulator.
The Coal Ministry was working on a timeline to put coal blocks up for auction in December and January, but the Ministry was not certain whether the Coal Regulatory Bill could be framed and passed by the Indian Parliament during its forthcoming winter session and in place before coal assets were put on the block, the official added.
The uncertainty had been compounded by the fact that there was no consensus within the government on whether the coal regulator should be vested with authority on prices, the official said.
The Coal Ministry has sought the opinion of the Law Ministry on going ahead with the auction before the sector regulator was set up, as well as investigated the option of creating the Coal Regulatory Authority through an executive order of the government with Parliament merely ratifying the decision.
The Union Cabinet would set out the methodology for fixing prices and determine the price of raw and washed coal, but several producers as well as consumers have opposed it, demanding that pricing should be left to producers.
Last month, government approved, in the first ever auction of such assets, the allocation of six coal blocks - with estimated reserves of about two-billion tonnes - to private companies in the coal, cement and steel sectors.
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