<div>Amidst the latest CBI allegations, former coal secretary’s CBI questioning and new revelations of the murky coal-gate, the minister of coal looks to boost the industry morale with a number of remedies and proposals to improve production. Conceding “tough challenges” facing the coal sector, union coal minister Sriprakash Jaiswal said seven open cast mines with 25 million tonnes capacity are to be promoted through the Mine Developer-cum-Operators (MDOs) model by year end. He added that FY 2012-13 has seen an overall increase of 17.5 million tonnes in domestic coal production. Of this increase, close to 16.4 million tonnes is from Coal India Ltd. (CIL), which has also registered a growth of 7.4 per cent in coal supply to the power sector during April-May 2013, revealed the minister at Assocham's 4th national coal conference in Delhi.<br /><br />The increased production according to the union minister is thanks to concerted efforts by the coal PSUs, close monitoring and better inter-ministerial co-ordination by officials of Ministry of Coal. Additionally he announced that under the Government Dispensation Route 14 blocks for power and 3 for mining have been put on offer recently for which allocation will be completed shortly. The minister explained in order to ensure increased availability more blocks will be offered to private sector in the near future.</div><div> </div><div><strong>Read: Power <a href="http://businessworld.in/en/storypage/-/bw/power-firms-to-pass-on-coal-costs-to-customers/r951913.0/page/0">Firms To Pass On Imported Coal Costs To Customers</a></strong><br /><br />For increased transparency in Coal Block allocation the provisions of MMDR Act have been amended and new set of rules have been framed for allocating new blocks through competitive bidding. And a Coal Regulatory Authority draft bill has been prepared based on the recommendations of various Committees and Experts Groups, which has been sent to the cabinet for approval. The authority is aimed at ensuring transparency in pricing, quality & supply of coal and resolve disputes between the producers and consumers.<br /><br />Citing the usual suspects of “environmental concerns, land acquisition and resettlement & rehabilitation, evacuation constraints and law and order” the minister assured speedy action and projects in the pipeline that will enhance production. Congratulating the private sector in their acquisitions abroad Sriprakash Jaiswal said, “We need to be aggressive in acquiring coal assets outside the country from long term energy security point of view.” <br /><br /><strong>Coal Supply To Power Producers</strong><br />Long due fuel supply agreement (FSA) mechanism was finalised on 21 June. The Cabinet Committee on Economic Affairs (CCEA) said Coal India Ltd (CIL) is to sign FSA for 78000 MW capacity, though actual coal supplies will commence after Power Purchase Agreements (PPAs) are finalised. The FSAs are to be for domestic coal quantity of 65 per cent, 65 per cent, 67 per cent and 75 per cent of annual contracted quantity (ACQ) for the remaining four years of the 12th Five Year Plan. The committee said to meet balance FSA obligations, CIL may import coal while power plants are also free to import coal themselves.<br /><br />CCEA has directed all concerned parties like ministry of coal to issue relevant guidelines for importing coal, orders supplementing the New Coal Distribution Policy and the higher cost of imported coal to be passed onto the customers as suggested by CERC. The ministry of power is also to issue appropriate advisory to CERC/SERCs and make modifications in the bidding guidelines to enable the pass through of higher cost of imported coal on case to case basis. <br /><br />A proposal had earlier been moved for approval of CCEA for import of coal by CIL in order to meet the shortfall in the domestic coal requirement of the thermal power plants from time to time. In February, the CCEA had put forth guidelines for import of coal on cost plus basis/pooling of prices and also directed formation of an Inter-Ministerial Committee (IMC) to consider the cases of power plants with aggregate capacity of about 16000 MW which would be commissioned by 31.03.2015 without any linkage coal supply. On the basis of the recommendations of inter-ministerial committee in April CCEA was considering the feasibility of higher cost of imported coal being allowed as a pass through in case of PPAs signed on competitive bid basis. The revised proposals submitted by Ministry of Coal (MoC) following the recommendations and in consultation with Ministry of Power and other Ministries CCEA announced the FSA mechanism today.<br /><br /> </div>
