Par Panel pitches for policy mechanism on price pooling

Pitching for pooling the prices of domestic and imported coal, a Parliamentary panel today recommended that a policy mechanism should be worked out on the same.

"The states, wherein coal mines are available can be asked to use domestic coal...And the states having coastal areas...Can use certain quantum of imported coal.

"This would only be possible if there is a mechanism of pooling of the coal price for domestic coal as well as imported coal," the Standing Committee on Coal and Steel said in a report.

The panel's observations come a day after the Cabinet Committee on Economic Affairs buried a proposal to pool prices of imported and domestic coal to make the fuel affordable to new power plants. In February, however, CCEA had approved in-principle the price pooling mechanism.

While no formal reason was given for burying the proposal, the source said that power projects commissioned before 2009 will continue to get coal at pre-fixed (below market) rates.

The committee report, placed in the Parliament, further recommended that the Coal Ministry should take steps to provide coal across the country at uniform rate and the coal prices should be based on calorific value only.

"A policy mechanism be evolved about the uses of domestic coal as well as imported coal," it said.

Price-pooling is the averaging of prices of domestic and imported coal to get a uniform feedstock price.

The pooling was being opposed for various reasons by older power plants, domestic coal producers as well as some of the state governments.

The Prime Minister's Office had earlier directed Coal India and Central Electricity Authority to work on pooling of prices to ensure 80 per cent supplies to power plants.