The Union ministry of coal on Wednesday ruled out a price hike, at least for the time being. Addressing a press conference, coal minister Shriprakash Jaiswal said, “Government cannot say about tomorrow’s situation but as of now no it is not necessary at all to increase prices given Wednesday’s scenario.”
The announcement would adversely affect the country’s largest coal miner, Coal India, which was facing falling profit margins on account of the wage revision. The wage burden has also made 33-odd projects unviable, but the coal ministry sees no case for increasing prices. “Increasing coal price is not the target, the target is to increase production, if a price increase is needed we are going to take a call, but now now,” said Jaiswal.
Earlier, Chairman of CIL Partha S Bhattarcharyya emphasised the need to increase prices to compensate for the additional cost on CIL on account of the wage revision, which is to the tune of Rs 7,864.73 crore and also to implement new projects.
The minister also informed that the Union coal ministry has decided to take the auction route for allotting captive coal blocks in the next round and was planning a coal regulator, within the 100 days work target, which the government had set for all ministries.
“As such no targets have been fixed as to how many coal blocks will be allotted to which sector. But in-principle the ministry has decided that the coal blocks for captive use will be allotted through auction route so that there is more transparency in the system and takers are genuine end users. We are mulling a policy change, amendments is required in the MMRD Act of 1957, ministry of mines is working on it, we will do the next round of allotment once the amendment is done,” he said.
So far, 196 blocks have been allotted for captive use, but less than 20 per cent of the blocks have started mining, 80 per cent have not started mining and production for various reasons, be it environmental clearance, land acquisition. The ministry is looking into it.
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The ministry, during the earlier UPA regime, had even considered de- allocating 14-15 blocks because of this.
However, for allocating captive coal blocks via auction route, the ministry requires the power sector’s consent, which consumes more than 80 per cent of the country’s coal production and the power sector might not be eager to get blocks through that route.
Rajiv Sharma, additional coal secretary, said, “We have a screening committee (for allotting blocks), with which we want to do away with. We are talking with the power ministry and other stakeholders so that we can be through with our auctioning policy.”
Sharma also said that notices had been served to the parties, whom the ministry thought were not taking enough initiatives to develop the blocks. But those parties would also get the opportunity to defend themselves.
“Our aim is to increase production, by putting the clearance and land acquisition process on fast track. Strict action will be taken against the allottees who have not started production,” added Jaiswal.
The minister also informed that there would be a coal regulator in place soon. It is part of the 100-day agenda, the other recommendation of T L Shankar committee will be implemented in phases.
The role of the regulator would be to look into the “aspect of disciplined mining, increasing coal production, grading of coal as well as the issues of pricing”, Sharma said.
The ministry in its 100 days work target has prioritised institutionalising the coal sector regulator, wholly implement the newly formulated coal distribution policy and finalise the mode of operation for under ground coal gasification.
Setting a coal regulator needs cabinet clearance and that would be done within the 100 days work target, Sharma added.
According to Jaiswal, the major hurdle for coal production in the country is land acquisition and getting forestry and environment clearance.
“The Center has already decided to give environmental clearance within six months of application and now I am asking the state governments to fix a time frame for environment and forest clearance,” he said.