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Home News Power Sector News Coal regulator will be established to regulate mining- Pranab

Coal regulator will be established to regulate mining- Pranab

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PranabThe UPA government has reiterated its commitment in the Budget 2010-11 to set up a coal regulator with a view to create a level playing field in the sector. With number of private players growing fast in the coal mining business, the need for an independent watchdog cannot be overemphasised. However, the functional effectiveness of the regulatory authority will critically depend on what kind of jurisdiction it is given.

The government has already set up two regulatory authorities in the energy sector—that is, central electricity regulatory commission (CERC) for determination of electricity tariffs and petroleum and natural gas regulatory board (PNGRB) for supervising auctioning of gas pipeline and city gas distribution projects. While the CERC has proved quite effective in its allocated role, the PNGRB is unable to fully exercise its authority in the face of legal disputes over its jurisdiction.

“As a member of the integrated energy committee in 2006, I had pushed for setting up an independent coal regulator. Even the coal ministry has stated the need for a regulator. So the re-affirmation of the proposal by the government is a welcome move,” former power secretary RV Shahi said.

Private players and state agencies are increasingly getting into coal mining. Besides, the government also plans to allocate captive coal blocks through tendering route. So there is a need for an independent authority to regulate the sector.

“However, it must be given a clear jurisdiction similar to the CERC if it is to prove effective,” Shahi said.

“It should not be a confused arrangement like petroleum and natural gas regulatory board (PNGRB) which is mired in disputes,” he added.

“The provision of a coal regulator is an interesting move by the government,” said Kuljit Singh, an energy expert with global consultancy firm Ernst and Young (E&Y). He expressed hope this should help in optimisation of domestic coal prices.

He, however, added that the proposed authority would be more effective if coal blocks are allocated to private players for commercial mining. “The regulator would be very effective if the government starts allocating coal blocks for free sale,” Singh expert said.

“This is a welcome decision. We hope the regulatory will be given full power to regulate coal prices,” said Harry Dhaul, director general, Independent Power Producers Association of India (IPPAI).


Source- Financial Express
 

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