At a time when it is entangled in a mess for giving undue benefits to few private companies while allocating coal blocks, the coal ministry has urged the power ministry that the benefits of cheaper coal should be passed on to the final consumer.
?A comprehensive regulatory and monitoring mechanism is required to be formulated to ensure that the benefit of cheaper coal is passed on to the consumer,? coal secretary SK Srivastava has written to power secretary P Uma Shankar in a letter dated September 4 , citing the Comptroller and Auditor General (CAG) suggestion for such a mechanism.
Ironically, the ministry’s plea comes at a time when the government argued that auctioning would have raised output prices in the key infrastructure sector of power. Referring to a letter in March, the coal ministry said that it had issued instructions to the coal block allottees to participate in the bids for sale of power for end-use projects as per the power ministry’s guidelines.
The latter then had requested to incorporate this as a condition for de-allocation of the already allocated coal blocks. However, the issue is still being examined by the law ministry.
In fact, the CAG in its draft report had said that because the state legally owns the natural resources on behalf of citizens, these can’t be allocated to private hands without ensuring their benefits being passed on to them.
?In this regard, it needs to be clarified whether mere participation in the bidding process would ensure that the benefit of cheaper coal will be passed on to the consumers as observed by CAG in their final report,? the letter said.
Srivastava’s letter assumes significance as the Inter-Ministerial Group (IMG) on the allocation of coal blocks will meet on September 12 to decide the fate of 29 mines given to companies such as Jindal Steel and Power and Reliance Power, among others.
Besides, the Prime Minister’s Office had also expressed displeasure over inaction by the coal ministry in cancelling blocks where mining has not taken place. The IMG is headed by additional secretary coal Zohra Chatterji and has representatives of steel, power, law, economic affairs and mines ministries, among others.