Private sector must take care of everything from land acquisition to safety norms

The public private partnership mode for raising coal, announced by the Finance Minister in the budget for bridging the demand supply gap in coal, may help add around 60 million tonnes by 2016-17, when imports are projected at 185 million tonnes.

The PPP model with Coal India Ltd (CIL) is likely to be a turnkey approach in which a private sector approach is taken to projects. These would be coal raising contracts of varying periods of up to 10 years delivering the coal on a per tonne basis.

Everything from land acquisition to getting regulatory clearances and following safety norms will remain the responsibility of the private sector partners of the CIL.

Given the shortage scenario, preparatory action has already been initiated. In the 12th plan a demand supply gap of 230 million tonnes for non-coking coal has been projected by the Coal Ministry, with the CIL tasked to produce 615 million tonnes in the best case scenario.

The budget said that despite abundant coal reserves, India imports large volumes of coal which crossed 100 million tonnes during April-December 2012. It is estimated to rise to 185 million tonnes in 2016-17.

On pool pricing for the blended coal, former CIL chairman P.S. Bhattacharya said that pooling of price by the CIL could only cover coal imported by the CIL to meet its FSA commitment. Such pooling, besides being revenue neutral to the CIL, should also not compromise with the CIL's power to set price of domestic coal in a deregulated regime.

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