Thursday, July 4, 2013

The Govt is thinking of bringing in an ordinance for setting up Coal Regularity Authority in India !!!

The Government proposes to establish a Coal Regulatory Authority in the country 

  • to regulate and conserve resources in the coal sector, 
  • protect the interests of consumers and producers of coal 
  • for matters connected therewith or incidental thereto. 
  • more optimal development of coal resources 
  • to ensure that the Indian coal companies raise their level of competence to be at par with international competitors. 

The proposed Coal Regulatory Authority would facilitate more 

  • standardized operational norms, 
  • establishment of bench marks in safety standards and performance, 
  • productivity etc through adoption of best mining practices, 
  • which would entail effective resolution of problems confronted by the coal miners. 
It would also deal with the issues like mining authorization, production and supply of coal, specify & determine the grades/quality of coal, price of coal, and adjudicate disputes amongst producers and consumers etc. 

Why Coal Regularity Authority ?

This is because of the year long scuffle between NTPC and Coal India Limited over the quality of coal being sold by CIL to NTPC.
  • In a solution to year old scuffle between Coal India and its biggest customer NTPC over the quality of coal issue, Central government has suggested both the companies to jointly test coal before it is dispatch. 
  • Recently, Coal India’s eastern subsidiary threatened to snap coal supplies to NTPC after the power producer refused to honour bills alleging its concerns over quality of coal.
  • Power producer NTPC has for a long now complained about country’s monopoly coal miner, Coal India’s quality of coal that is heavily adulterated with rocks and stones for its plants, which besides hurting company’s output also has been slowing down the incoming contracts. 
  • On account of this the company also held back a payment of Rs 2000 crore to the coal behemoth. 
  • NTPC, further, insisted that it would pay only on the basis of the calorific value of the fuel it receives, not for the entire consignment that includes rocks and stones.

However, both state firms have now agreed on adopting a common method of calculating price depending on the amount of heat that can be generated by burning a particular amount of coal.

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