Law Ministry will now ready the final draft Bill
The proposed regulator for the coal sector will not have powers to decide the price of coal. The Group of Ministers (GoM) headed by Finance Minister P. Chidambaram took a decision to this effect last week. Giving the proposed regulator powers to decide on coal pricing has been the most contentious issue since the draft Coal Regulatory Bill was floated.
The Power Ministry wanted the regulator to determine the price in the interest of power companies such as NTPC, while the Coal Ministry was opposed to it. “Pricing must be left to the producer of coal. The regulator will have powers to adjudicate on disputes related to price, quality, and supplies. All disputes will be adjudicated by the regulator. And then there will be an appellate authority,” Chidambaram informed after the hour-long meeting.
Re-drafting
The Finance Ministry said discussions related to the draft Coal Regulator Bill are over. There is complete agreement on what the contents of the Bill should be, Chidambaram said.
“All Sections (of the Bill) were examined carefully. Now the Law Ministry has been asked to re-draft some Sections. The re-drafted Bill will come back to the GoM for formal approval. Then it would go to the Cabinet,” Chidambaram said. However, the power producers feel that a regulator without pricing power would not help the sector.
“It is necessary to give pricing power to the regulator,” said Ashok Khurana, director-general, Association of Power Producers, a lobby group for private power producers. Compared with the Telecom Regulatory Authority of India (TRAI), which also does not decide prices, Khurana said “In the power sector, the output is regulated. Unless the input is also regulated correspondingly, how will you deliver? To allow a monopolistic company (Coal India) to decide prices is not right.”
Allocation of power
It is to be seen how the Government would allocate the powers between the regulator and the Office of the Coal Controller. Currently, powers such as approval for coal mining remain with the Coal Controller.
The Coal Ministry has not yet decided on dismantling the Coal Controller. The regulator is expected to have the authority to approve methods of testing, sample collection and weighing, among others.
The proposed regulator for the coal sector will not have powers to decide the price of coal. The Group of Ministers (GoM) headed by Finance Minister P. Chidambaram took a decision to this effect last week. Giving the proposed regulator powers to decide on coal pricing has been the most contentious issue since the draft Coal Regulatory Bill was floated.
The Power Ministry wanted the regulator to determine the price in the interest of power companies such as NTPC, while the Coal Ministry was opposed to it. “Pricing must be left to the producer of coal. The regulator will have powers to adjudicate on disputes related to price, quality, and supplies. All disputes will be adjudicated by the regulator. And then there will be an appellate authority,” Chidambaram informed after the hour-long meeting.
Re-drafting
The Finance Ministry said discussions related to the draft Coal Regulator Bill are over. There is complete agreement on what the contents of the Bill should be, Chidambaram said.
“All Sections (of the Bill) were examined carefully. Now the Law Ministry has been asked to re-draft some Sections. The re-drafted Bill will come back to the GoM for formal approval. Then it would go to the Cabinet,” Chidambaram said. However, the power producers feel that a regulator without pricing power would not help the sector.
“It is necessary to give pricing power to the regulator,” said Ashok Khurana, director-general, Association of Power Producers, a lobby group for private power producers. Compared with the Telecom Regulatory Authority of India (TRAI), which also does not decide prices, Khurana said “In the power sector, the output is regulated. Unless the input is also regulated correspondingly, how will you deliver? To allow a monopolistic company (Coal India) to decide prices is not right.”
Allocation of power
It is to be seen how the Government would allocate the powers between the regulator and the Office of the Coal Controller. Currently, powers such as approval for coal mining remain with the Coal Controller.
The Coal Ministry has not yet decided on dismantling the Coal Controller. The regulator is expected to have the authority to approve methods of testing, sample collection and weighing, among others.
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