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Union Budget announces PPP mode for raising coal production

BT Online Bureau     February 28, 2013
Finance Minister P. Chidambaram in his Budget speech on Thursday said the public-private-partnership (PPP) model should be followed to raise coal production .

Pointing out that coal imports were projected to go up to 185 million tonnes by the end of the 12th Plan period in 2016-17, the finance minister said there was no other option other than importing coal and adopting a policy of blending and price pooling for imported coal.

"One of the ways forward (to raise coal production) is to devise a PPP policy framework with Coal India Ltd as one of the partners in order to increase production to supply to power producers and other consumers," Chidambaram said in the annual budget speech to Parliament.

He said such a policy was under "active consideration" and the coal minister would make the appropriate announcement.

Price pooling of imported coal is under consideration of the ministry. As per the existing arrangement, state-owned Coal India follows the cost-plus method for imported coal.

Many state governments are not in favour of price pooling as it would affect power rates.

with inputs from PTI

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