Coal block auctioning to start without regulator

74 producing blocks to go under hammer first; regulator for non-operational mines later

As the government plans to expedite coal block reallocation to the private sector through auctioning, it appears in no hurry to set up a regulator for the sector. Not only does the Coal Mines (Special Provisions) Ordinance skip the issue, government officials say for 74 producing blocks that would be put up for e–auction by December, a regulator is not required.

“The coal blocks which would be put for e-auction are all for end-usage in power, cement and iron production. It is the commercial mining by private companies that needs to be put under vigilance and that would be done later, after the first batch of auction commences,” said a senior official.

Valuation of coal reserves and assets in these 74 blocks would be done by a committee under Pratyush Sinha, former chief vigilance commissioner .

The Supreme Court had cancelled 204 coal blocks saying their allocation was “illegal” and “unconstitutional”. The government has thereafter promulgated an ordinance for the reauction. The transparent process in December would start with a pool of 42 operational mines and 32 nearing production, for end-use in the power, cement and iron and steel sectors. Through the ordinance, the government has added enabling provisions in the Coal Mines (Nationalisation) (CMN) Act, 1973, and the Mines and Minerals (Development and Regulation) Act, 1957,  for allowing commercial mining.

While the previous UPA government through a gazette notification in February 2014 did notify setting up of a coal regulator, no further follow up was done in the matter.

The role of the regulatory body under the Coal Regulatory Authority (CRA) Bill of 2013 was to look into pricing of coal on a cost—plus basis. Officials said it’s unlikely that the CRA Bill would be placed in the winter session of Parliament.  “The priority is to make available coal to the sectors in want of fuel. Undoubtedly, once the sector opens up, a regulator would be needed,” said a government official.

The UPA government had through an executive order notified setting up of a coal regulator earlier this year but the new body remains un-operational with not even appointments to it being made.