Coal Panel Chief Against Govt Interference

Former coal secretary K S R Chari, who authored the coal privatisation policy, has criticised the government for setting up a regulatory body and introducing the competitive bidding process for the coal sector, which form the basis of the new policy unveiled by the government early this week.

``I am against Central government interference of any kind, Chari told Business Standard.

He said his report to the Government was based on the concept of a free market economy and favoured complete decontrol of the sector.

``There can be no half way in such a situation. Let the market decide, he said.

 

Chari revealed that he had appended a dissent note to the report which was later shown as part of the `chairmans report.

He said his suggestion to bring out another volume of the report which contained critical information was turned down by ministry officials.

``I am extremely disappointed with the bureaucracy he said.

Chari explained that the governments decision to set up a regulatory body to arbitrate price disputes and allot blocks is likely to increase corruption.

``The involvement of the government defeats the very purpose of privatisation, he remarked.

In case of competitive bidding, Coal India Ltd (CIL) and other public sector undertakings (PSUs) should hand over lease hold and virgin territories to the states and be allowed complete freedom to take decisions on the sale of mines, Chari said.

``Minerals are a state subject and hence the Centre should let them take their own decisions, he added.

Let the PSUs and the private sector co-exist as they did before coal nationalisation in 1971, the former coal secretary said.

Chari, however, wanted CIL to be adequately compensated for carrying out exploration work for mines to be opened up for the private sector.

On the issue of allowing foreign equity in domestic companies, Chari said the policy was not clear on this aspect too.

``No foreign company will invest its funds unless it can make money out of its ventures. Hence, the coal policy should have been made more attractive, he said.

Chari, who had been serving as coal secretary when the sector was nationalised, said corruption and the bureaucratic stranglehold had completely derailed such a measure.

``Even now the bureaucrats want privatisation in phases because they dont want to let go of control completely, he observed.

He said he had suggested that power stations should be located at pitheads instead of near cities.

This would save transportation costs.

Instead of selling power to state electricity boards, the stations should sell them directly to the power grid, Chari said.

In fact, the Chari committee report, submitted to the government in April 1996, had been put on the backburner.

According to sources in the coal ministry, certain officials had stalled the report as they were against complete deregulation as suggested by the committee.