The government is likely to hold two key meetings on coal next week which will decide how the sector moves forward on the allocated blocks and the forthcoming competitive bidding regime.
The inter-ministerial group (IMG), consisting of senior officials of related ministries, will meet on Monday to review the progress in the issue.
The PMO is understood to have set a deadline of September 15 for the Coal Ministry to take a final decision on de-allocation of coal mines to the 58 allottees to whom show-cause notices have been issued for not beginning production.
Headed by Additional Secretary in the Coal ministry, Zohra Chatterji, and comprising representatives from steel, power, law, economic affairs and mines ministries, the committee is said to have favoured de-allocation of 58 coal blocks given away to the private and public sector companies.
Separately, the Group of Ministers on coal, headed by Finance Minister P Chidambaram, may also meet next week to take a final decision on a regulator for the sector. A regulator is a must under the regime of a liberalised coal sector as the government has already decided to allocate blocks only through competitive bidding in future.
Much before the Comptroller and Auditor General submitted his controversial report on coal, the ministry had issued notices to companies for not developing the blocks allotted to them. Public sector companies such as NTPC and MMTC were also issued notices. The CAG named 56 private firms which have not started production in the blocks allotted to them.
Licence revocation
The IMG was set up by the PMO to review the progress of coal blocks allocated to companies for captive use. It is possible, official sources said, that the IMG may favour revocation of the licences of erring companies.
The Coal Ministry is said to be under pressure from the PMO to act against the companies which have not begun production several years after getting their licences, some have not applied for clearances such as land acquisition, environment etc.
As regards the GoM, it is likely to finalise the Bill related to setting up of the regulator for the coal sector. Chidambaram had said recently that “we will wrap it up in our next meeting,” referring to the draft Bill.
While auction for allocation will start only next year, the process will reach a stage when Crisil, an analytical firm, will give its report shortly. The firm will prepare the methodology for determining reserve price for coal block auctions. Coal Minister Sriprakash Jaiswal had said once Crisil submits its report, the auction process will begin. A total of 54 mines will be auctioned. Bidding documents are being prepared in consultation with the state governments.
Chidambaram had said recently: “… In one more meeting of the GoM, we will wrap up the Bill and take it to the Cabinet. We certainly don’t want the coal regulator to become the old coal control. I hope all of you agree that you want regulation, not licensing control.”