By Ruma Dubey

Whew! Finally it has happened. Coal India has lost its monopoly but hoping that it would get out of stupor is being naïve; almost like hoping that politicians will be corruption free!!

Today, the Cabinet Committee of Economic Affairs gave its nod for commercial coal mining for not just Indian but even foreign companies. These private sector companies can now bid for coal mines without any price restrictions. This is as per the newly cleared auction guidelines. Till date, power sector and aluminium companies in the private sector were the only ones allowed to bid and for the first time, this has become free for all to bid.

This was a move which was long overdue given the fact that 70% of the electricity that we use comes from coal and with Coal India never being able to either meet its target or even scale up production.

The details of the methodology and number of mines which will be opened up are not yet disclosed; details of this are awaited.

This is most certainly a move in the right direction as no company should ever enjoy a monopolistic position. Competition is healthy but it is unlikely that the entire leadership will be relinquished; the Govt will ensure that it does not become another MTNL or Air India.

The rumour is that initially only 5-6 mines will be opened up for auction.

This is something that the NITI Aayog had proposed couple of years ago. It had put up a proposal that fresh coal production should come from the private sector mines and the entire process of allocating coal blocks to independent companies needs to be overhauled.

Well, for now, based on just these skeletal details, it does look like Coal India will have to pull up its socks and get to work. This is a developing story and we will keep you updated as and when more about the methodology is given……