Cabinet approves regulator for coal sector

The coal sector in India will now have a regulator that will prescribe principles for price determination of the fuel, adjudicate on disputes between parties, and enforce closure of mines.

The coal ministry in May 2012 had moved the Cabinet Committee on Economic Affairs (CCEA) seeking approval of the Coal Regulatory Authority Bill, 2012.

The regulatory authority will also specify procedure for sampling and washing of coal.

"The Authority (coal regulator) shall specify methods of testing for declaration of grades or quality of coal, monitor and enforce closure of mines, specify principles and methodologies for price determination of raw coal and washed coal and any other by-produce generated during the process of coal washing, adjudicate upon disputes between parties and discharge other functions as the Central Government may entrust to it," an official statement said after a CCEA meeting here Thursday.

The coal regulator "shall help in the regulation and conservation of coal resources and will benefit all stakeholders; that is coal companies, coal consuming industries such as power, steel, cement and coal bearing States and people, directly or indirectly associated with the coal industry," said the statement.

A fund called "The Coal Regulatory Authority Fund" would be created and all grants, fee and charges received by the Authority shall be credited to this fund. After passing the Coal Regulatory Authority Bill, 2013, in parliament, details would be worked out and submitted to the government for appropriate financial sanction for the initial start-up funding, it said.

The cabinet also approved that pending enactment of the legislation, the regulator will be set up through an executive order.

The regulator, however, will have no say in allocation of coal blocks and the Coal India Ltd. (CIL) will continue to decide the price of coal.

A source in the coal ministry told IANS the dilution in powers of regulator was the result of opposition from other ministries which do not want to lose control to an independent authority over the fuel's pricing and granting mining authorisations.