Facing criticism for its inability to meet the growing demand of coal, the government is working on a proposal under which CIL would engage private sector companies to undertake mining on behalf of the PSU.
The proposal to involve private sector under the PPP mode, sources said, was recently discussed between Planning Commission Deputy Chairperson Dr Montek Singh Ahluwalia and Coal Secretary Mr Alok Perti.
The Coal Ministry, they said, is considering a model agreement - mining, development and operations (MDO) - under which private sector entity would undertake mining operations, while the ownership and sale of coal would rest with Coal India (CIL).
Dr Ahluwalia, in a letter to Coal Minister Mr Sriprakash Jaiswal has recently said, “It should be possible to expand coal mining operations rapidly through a PPP model that can enable a fair and transparent framework based on competitive bidding.”
CIL, in which government has a majority stake, has already done some preliminary work on the new model.
Ahluwalia wants the Ministry to prepare a model concession agreement which could be put up before the inter-ministerial group and the Cabinet for approval.
CIL which accounts for over 80 per cent of the domestic coal production missed its revised production target as it achieved only 435.84 million tonnes (MT) of coal in fiscal 2011-12 against 447 MT.
In order to meet fuel needs of power companies, the government has recently issued a Presidential directive to CIL asking it to enter into fuel supply pacts with power producers for minimum assured supply.
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