Union Coal Ministry has decided to implement minor recommendations made by Pratyush Sinha committee such as the establishment of single-window clearance mechanism and permitting non-regulated industries to use coal in their different plants.
Background:
The current system of coal block allocation via e-auctions was put in place after the cancellation of 204 coal-block allocations in 2015
However, the e-auctions failed to sustain interest as companies which bought the blocks found it cheaper to import coal to meet their requirements rather than developing the mines.
There were no takers for subsequent blocks, forcing the Centre to do a rethink.
In July 2018, a High-Powered Expert Committee (HPEC) chaired by Pratyush Sinha submitted its report suggesting major changes in the coal block auction system.
Recommendations:
The recommendation of Pratyush Sinha committee coincides with the opening up of the coal sector for commercial mining.
These recommendations rest on four tenets — ensuring transparency and fairness, equity, early development of coal blocks and simplicity of implementation.
Key recommendation:
Developing a Coal Index for determining the value of blocks. Currently, the valuation is on the basis of the notified price of Coal India Ltd.
Scrap the current practice of cancelling an auction if the number of bidders is less than three. Instead a single-bid should be accepted if biddings fail to find eligible bidders.
Only a default in achieving critical milestones should attract penalty against the earlier penalty for each default.
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