TMC, Left, Object To It, Claim Bid To De-Nationalize Mines
The Lok Sabha has passed the Coal Bill that will facilitate auction of mines and allow the government to end state monopoly on the sector with an executive order, setting the stage for the tougher challenge of getting the approval of the upper house of Parliament where the ruling party is in minority. The Coal Mines (Special Provisions) Bill 2014 to replace coal block allocation ordinance that unveiled the NDA government's ambitious coal sector reforms was introduced in the Lok Sabha by coal minister Piyush Goyal, who insisted that the bill did not seek de-nationalization of coal mines, amid strong objections from TMC and Left parties. Saugata Roy (TMC) said it was aimed at de-nationalization of coal mines, which were taken over by the government way back in 1973. Supported by the Left parties, he said the legislation nullified the Coal Mines Nationalization Act of 1973 and allowed “total exploitation“ of the mines and the people of the country. The minister said the bill had been brought in following the Supreme Court decision cancelling 204 coal blocks, to avert a crisis in power generation and rendering lakhs of workers jobless. Thousands of crores of bank funds would also have turned into “stressed assets“ or NPAs. The bill provides for allocation of coal mines and vesting of the right, title and interest in and over the land and mine infrastructure, together with mining leases, to successful bidders and allottees through a transparent bidding process. This will ensure continuity in coal mining operations and production of coal. The Bill has been keenly awaited by companies in the power, steel and cement sectors, many of which have large plants that had captive mines that have been taken away. Companies are keen that the Bill is passed to strengthen the auction process for which the government promulgated the ordinance. “The Coal Mines (Special Provisions) Act makes a clean break from the past, with clear ring-fencing of liabilities while permitting consents and assets to be taken over. This sets a robust and secure stage for the current round of auctions,” said Kameswara Rao, leader for energy, utilities and mining at PwC India. Many opposition parties are demanding the Bill be referred to a select committee. Piyush Goyal has consistently ruled out de-nationalisation of coal and has gone out of his way to assure people that state-run Coal India would actually be strengthened, not hurt. He also says that the auction of mines, permits on which were cancelled by the Supreme Court earlier this year, would not lead to an increase in power tariffs. Piyush Goyal has said in the past that he expects other parties to support the new Bill because it will help numerous small businesses and aspiring entrepreneurs who are facing the acute scarcity of fuel. The government expects the auction to lead to significant increase in coal output as many idling mines would be developed, and new technology as well as higher productivity would help the sector. He also ruled out any increase in power tariffs due to the auction. “Power tariff will not go up. Power sector is a regulated sector. Reverse bidding auction will happen. Prices will fall,” he was quoted as saying in a report. We will look for an alternative provision if coal bill is not passed in Rajya Sabha,” Piyush Goyal said, hinting at an ordinance.
The Lok Sabha has passed the Coal Bill that will facilitate auction of mines and allow the government to end state monopoly on the sector with an executive order, setting the stage for the tougher challenge of getting the approval of the upper house of Parliament where the ruling party is in minority. The Coal Mines (Special Provisions) Bill 2014 to replace coal block allocation ordinance that unveiled the NDA government's ambitious coal sector reforms was introduced in the Lok Sabha by coal minister Piyush Goyal, who insisted that the bill did not seek de-nationalization of coal mines, amid strong objections from TMC and Left parties. Saugata Roy (TMC) said it was aimed at de-nationalization of coal mines, which were taken over by the government way back in 1973. Supported by the Left parties, he said the legislation nullified the Coal Mines Nationalization Act of 1973 and allowed “total exploitation“ of the mines and the people of the country. The minister said the bill had been brought in following the Supreme Court decision cancelling 204 coal blocks, to avert a crisis in power generation and rendering lakhs of workers jobless. Thousands of crores of bank funds would also have turned into “stressed assets“ or NPAs. The bill provides for allocation of coal mines and vesting of the right, title and interest in and over the land and mine infrastructure, together with mining leases, to successful bidders and allottees through a transparent bidding process. This will ensure continuity in coal mining operations and production of coal. The Bill has been keenly awaited by companies in the power, steel and cement sectors, many of which have large plants that had captive mines that have been taken away. Companies are keen that the Bill is passed to strengthen the auction process for which the government promulgated the ordinance. “The Coal Mines (Special Provisions) Act makes a clean break from the past, with clear ring-fencing of liabilities while permitting consents and assets to be taken over. This sets a robust and secure stage for the current round of auctions,” said Kameswara Rao, leader for energy, utilities and mining at PwC India. Many opposition parties are demanding the Bill be referred to a select committee. Piyush Goyal has consistently ruled out de-nationalisation of coal and has gone out of his way to assure people that state-run Coal India would actually be strengthened, not hurt. He also says that the auction of mines, permits on which were cancelled by the Supreme Court earlier this year, would not lead to an increase in power tariffs. Piyush Goyal has said in the past that he expects other parties to support the new Bill because it will help numerous small businesses and aspiring entrepreneurs who are facing the acute scarcity of fuel. The government expects the auction to lead to significant increase in coal output as many idling mines would be developed, and new technology as well as higher productivity would help the sector. He also ruled out any increase in power tariffs due to the auction. “Power tariff will not go up. Power sector is a regulated sector. Reverse bidding auction will happen. Prices will fall,” he was quoted as saying in a report. We will look for an alternative provision if coal bill is not passed in Rajya Sabha,” Piyush Goyal said, hinting at an ordinance.
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