Coal regulator Bill in final stages

NEW DELHI: The government has set the ball rolling for the establishment of an independent coal regulator, a move being seen as a precursor to opening the controlled coal market.

It is finalising the Coal Governance & Regulation Authority Bill that would establish the office of the new regulator responsible overseeing issues pertaining to pricing and supply of coal.

The draft of the new Bill is being finalised by the coal ministry in consultation of the Planning Commission. Once the Bill is ready, the coal ministry proposes to issue a note for consideration of the Cabinet.

The government proposes to introduce the new Bill in Parliament at the earliest as it is in the final stages of drafting, a source in the government said. The views of coal consumers, producers and other stakeholders have already been received on the issue.

As per the proposal, the new regulator would establish credible and transparent regulatory framework. It will help in improving exploitation and allocation of available resources, regulate and fix coal prices including that to be sold through the electronic route, regulate trading margins and enable competitive coal market to take shape for user industries.

It would also finalise the fuel supply and transport agreements (FSTA) with power sector consumers that account for almost 80% of total coal consumed in the country.

It is suggested that all the regulatory functions of the ministry of coal as well as the government-owned coal companies should be passed on to the regulator. The proposed independent regulator will comprise experts with wide experience of the sector.

Initially the regulatory authority would be funded through the consolidated fund of the budget. License fees, petition fees and other such fee would be consolidated in a separate fund to finance the regulatory body. The new regulator would also replace the screening committee that oversees allotment of coal blocks and pricing of coal.

While the regulator would oversee the growth and development of market monopolised by the government, its establishment is being seen as move towards opening up the sector to commercial mining by the private sector. The regulator would be better equipped to regulate a market with large number of players and ensure fairplay.

The government has been thinking about regulating the coal sector for last several years. Institution of coal regulator has been favoured by a coal ministry committee and an Expert Committee on Coal Sector reforms earlier. The Integrated Energy Policy framed by Planning Commission member Kirit Parikh has also suggested regulation of the industry.