Coal & Power Ministries differ on proposed regulator's powers

MoS for Power (Independent) Scindia wants watchdog to fix coal prices but coal minister Jaiswal opposes such a move

Coal Minister Sriprakash Jaiswal and Minister of State (Independent Charge) for Power Jyotiraditya Madhavrao Scindia continue to differ on whether the proposal that the coal regulator should be allowed to decide on coal price. The Group of Ministers (GoM) headed by Finance Minister P. Chidambaram is likely to meet to deliberate on the new draft for an independent regulatory authority for the coal sector.

“The GoM, which has held several rounds of meeting since July last year, hopefully should arrive at a conclusion on setting up of a Regulator,” said a Senior Coal Ministry official working on the modalities. But, whether the issue of giving the regulator powers to fix coal price will be resolved or not remained unclear.

The Power Minister wants the proposed Regulator to ‘determine the price of raw coal and washed coal and any other by-product generated during the process of coal washing.’ A need for an independent regulator is felt more today in the backdrop of the recent dispute between two Maharatna public sector giants, NTPC and Coal India, over quality and pricing of coal.

But, the Coal Minister is opposed to this proposal. This is mainly because the nodal Ministry doesn’t want to let go of the pricing power from its ambit, said the Government official. The Coal Ministry wants to keep with itself the power to grant permission for opening a coal mine or cancelling it. Also, the Regulator would not overlook the laws administered by the Ministry of Labour, Mines, and Environment and Forests. The GoM had said that the Regulatory Authority should have the provision to counter the methods and practices followed by the monopolistic producer (Coal India Ltd). There were also repeated complaints from buyers. Therefore, the Coal Ministry has decided to empower the Regulator with the authority to approve methods of testing, sample collection and weighing.

States & not discoms should bear power subsidy costs: Jyotiraditya

“I have no problem if a state Government wants to give subsidy, or even free power. But that free power must be given not on the balance sheet of the discom. That free power must be given on the balance sheet of the state Government,” Scindia said.

Advocating that discoms be kept cash-neutral pursuant to any state subsidy, Scindia said: “It (free or cheaper power) should become a subsidy item in the state Government’s balance sheet, and not on the discom’s balance sheet, which today is not the case.

“The states say they will give free power, but the losses suffered by the discoms are not bridged from the state government’s coffers and in the end it is the discom that suffers. This is the problem.”

While Scindia did not specifically name any state, the Governments have announced plans for or are already providing electricity free of cost or at lower rates to certain sections of the society, such as farmers.

The minister’s comments come at a time when financial position of most of the discoms is in bad shape and the Centre’s `1.9 lakh crore debt restructuring package for these entities is facing roadblocks due to certain reservations expressed by some states.

Noting that the central government also gives a lot of subsidies, Scindia told that these subsidies are not given on the balance sheet of any ministry but “from its (central Government’s) own balance sheet”.

  Similar Posts

Share it