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Monday, 15 February 10
PVT ENTRY IN COAL MINING TO BE DELAYED


Entry of private players in coal mining will be delayed. Contrary to expectations, the coal ministry will not move in the Budget session a bill that would allow auctioning of coal mines to companies without the restriction of captive use.

The postponement comes in the wake of a decision taken by the PM’s Energy Coordination Committee that the bill should be moved only after a consensus is arrived. The committee had taken the decision after the bill was stalled in the face of stiff opposition from trade unions.

The government had asked a ministerial panel under finance minister’s chairmanship to examine the matter and ordered the Planning Commission to prepare a report. The panel has to make specific recommendations on policy measures on exploration and mining of coal.

But in the Budget season, the bill has taken a back seat. The bill has been hanging fire since 2000 when it was moved in the Rajya Sabha. It was cleared by the standing committee in 2001 but no progress was made in the face of stiff opposition from trade unions. At present, private industries are allowed a role in coal mining only for captive use.

The coal ministry has been proposing to opt for a lumpsum payment route for auctioning coal blocks, instead of royalty and profit-share system being followed in case of handing out oil or gas concessions. The bid amount will be realised in instalments over 10 years. Bidders will be asked to make their offer above the floor price worked out on the basis of the government’s estimate of coal reserves in a block.

On June 20 last year, TOI first reported that the ministry was moving to set up a regulator in six months or so before opening up coal mining to private players through the open bidding system.
Source : Times of India



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