Government gearing up to bring in bill to open coal sector

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Economic Times, October 28, 2014

The government is working overtime to start the auction of coal blocks and introduce a bill in Parliament by December as a follow-up to the ordinance that facilitates the sale and allows the coal sector to be opened up.

Guidelines for the auction will be framed by November and an inter-ministerial panel will be set up to do the groundwork, which follows the Supreme Court’s order scrapping coal blocks awarded to companies since 1993. The panel’s tasks will include identifying mines, segregating them for various sectors and appointing an official liquidator and a commissioner of payments.

The committee will have senior officials from the Ministry of Coal, the Central Mine Planning & Design Institute and the ministries of power and steel, a senior government official said.The government also plans to set up a Directorate General of Coal, on the lines of the Directorate General of Hydrocarbons for the petroleum sector, which will conduct the auction of coal blocks in a fair and transparent manner.

The Supreme Court last month cancelled the allocation of coal blocks, including those that have started production, after declaring them illegal. In 2012, the Comptroller and Auditor General of India had passed adverse comments against the allotments.

The official said the coal ministry will seek advice from the law ministry on the proposed amendments to two laws governing coal mining in the country — the Coal Mines (Nationalisation) Act of 1973 and the Mines and Minerals (Development & Regulation) Amendment Act of 1957.

The October 21 ordinance allowing commercial mining by private companies and the auction of coal blocks has to be converted into legislation in the winter session of Parliament, likely to start from November 24.The coal ministry has asked companies whose captive coal blocks were cancelled for details on the cost of land acquired by them and the machinery employed at mines.

If the companies fail to provide the information within a fortnight, the government will presume no cost has been incurred towards land and mine infrastructure.

According to the ordinance, the government will ‘e-auction’ all 204 cancelled captive coal blocks and 74 mines are expected to be put up for sale in the first round, likely in December.

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