The new law on coal block allocation will not lead to higher electricity tariff for consumers, Power and Coal Minister Piyush Goyal assured the Lok Sabha Friday, following which the lower house passed the Coal Mines (Special Provisions) Bill, 2014, which sets the norms for the auction of 204 mining blocks cancelled by the Supreme Court in September.
The bill, which seeks to replace an earlier ordinance issued in the wake of the apex court order, was introduced by Power Minister Piyush Goyal two days ago, with opposition members charging during the debate that it was seeking to de-nationalise the coal sector by reversing a decision of the 1970s.
"Power tariff will not go up. Power sector is a regulated sector. Reverse bidding auction will happen, prices will fall," he said replying to a debate on the bill.
The minister said the step was taken primarily to address the requirement of the Supreme Court and to avoid a major crisis in electricity generation in the country due to a shortage of coal, and to protect the interests of millions of workers.
"After e-auction of coal is introduced, it will bring down electricity prices. It will give more power purchasing capacity to the consumers," he said.
Opposition members, notably Jyotiraditya Scindia of the Congress -- a former union power minister himself -- and Kalyan Banerjee of the Trinamool Congress, wanted the bill to be sent to the relevant standing committee of the parliament for proper scrutiny.
Both members said neither the ordinance issued by the government nor the passage of the bill to replace it were required to auction 74 of the coal blocks that were ordered by the top court to be cancelled. These are now proposed to be re-auctioned or allocated in the first phase.
"This is a wonderful opportunity to recast the coal sector. It is being wasted," said Scindia, calling for the restructuring of the state-run Coal India, which accounts for around 80 percent of India's production.
But Goyal countered saying the bill aims to rationalise and set the proper norms in place for mining operations, consumption and sale of coal in the country.
"We have to fulfill the end-users requirements first. We have to think about the people who buy coal for domestic use for a high cost. We have to bring down the prices," he said.
Coal Secretary Anil Swarup had told reporters here last week that the bidding process for what he termed will be a historic auction of coal blocks would get underway Dec 22, with the release of tender documents.
The central government will auction or allot 18 more coal blocks with a total capacity of about 120 million tonnes, in addition to the 74 blocks already in the first lot, to meet the growing needs of the power sector.
"When we analysed the number of coal blocks for auction, we discovered that sufficient number of coal blocks weren't available for the power sector. Hence we scouted for more, which are better in terms of readiness. So those 18 blocks have also been included."
Of the 92 mines to be allotted and auctioned in the first lot, 57 would be given to the power sector, and the remaining would be for other industries like steel and cement. Further, out of 57 blocks for the power sector, 23 will be considered for the states.
