Ministry to review surplus coal usage

Siddhartha P Saikia, New Delhi, Aug. 28

The Coal Ministry has started fresh round of discussions with other involved ministries including Power and Steel on the surplus coal policy that was kept in abeyance for the last two years.

The policy is aimed to determine the mandate for use of excess coal from captive mines. According to the Coal Mines (Nationalisation) Act 1973 that oversees captive mining, all coal mined from the block must be used entirely for the respective end-use project.

The Cabinet Secretariat advised the Coal Ministry to start the process afresh and take the policy for consideration of the Cabinet, a Government official privy to the development told Business Line.

Earlier, when the policy was floated, the Prime Minister's Office sounded caution and directed the nodal Ministry to put it on hold. Also, the Law Ministry expressed objections for diversion of excess coal from mines attached to the Ultra Mega Power Projects (UMPP). The Coal Ministry is of the view that if there is any excess coal, it should be given to Coal India or its subsidiary at a notified price.

However, several private companies approached the Government for using excess coal for other projects. For example, Reliance Power had approached Government and received the nod to use excess coal from attached mines in the Sasan UMMP for another project of the same company.

In August 2008, an empowered Group of Ministers (eGoM) decided to allow Reliance Power to use excess coal from the Sasan Project for its other project in Chitrangi, Madhya Pradesh.

On, April 28, 2012, the issue came up again to eGoM, when the panel decided to stand by the previous decision and did not review it.

However, the Comptroller and Auditor General of India (CAG) in one of its report questioned the special dispensation to Reliance Power.

On the other side, Government has also constituted a panel under Planning Commission member B.K. Chaturvedi to look at 'coal banking.'

The Chaturvedi-led panel is looking at different possibilities for use of excess coal from captive mines. It has also sought the Law Ministry's opinion on the issue.