The proposed regulator for the coal sector will not have powers to decide price of the coal. This decision is being taken by Group of Ministers (GoM) headed by Finance Minister P. Chidambaram on Tuesday.
“Pricing must be left to the producer of coal. The Regulator will have powers to adjudicate on disputes related to price, quality, and supplies. All disputes will be adjudicated by the regulator. And then there will be an appellate authority,” Chidambaram said after the hour-long meeting.
The Finance Ministry said that the discussions related to the draft Coal Regulator Bill are over. There is complete agreement on what the contents of the bill should be, he added.
The pricing power to Regulator had been the most contentious issue since the draft Bill was floated. The Power Ministry wants the regulator to determine the price in the interest of power companies such as NTPC, while Coal Ministry was opposed to it.
“All the sections (of the Bill) were examined carefully. Now the Law Ministry is asked to re-draft some sections. The re-drafted bill will come back to the GoM for formal approval. Then it would go to the Cabinet,” Chidambaram told media persons.
However, the power producers feel that Regulator without pricing power would not help the sector.
“To give pricing power to the Regulator is necessary,” said Ashok Khurana, Director-General, Association of Power Producers (APP). APP is the lobby group for private power producers.
When compared with the Telecom Regulatory Authority of India (TRAI), which also doesn’t decide price, Khurana said, “In power sector, the output is regulated. Unless the input is also regulated correspondingly, how will you deliver? To allow a monopolistic company (Coal India) to decide price is not right.”
It is to be seen how the Government would separate the powers between Regulator and the Office of the Coal Controller. Currently, powers such as approval for coal mining remains with the Coal Controller.
The Coal Ministry has not yet decided on dismantling the Coal Controller. The Regulator is expected to have authority to approve methods of testing, sample collection and weighing, among others.