The Economic Times reported that the Indian government will soon end Coal India Ltd.’s (BSE:533278) monopoly on coal by inviting bids from private companies interested in mining the fuel. The country’s goal is to increase the number of producers of the resource.
As quoted in the market news:
Reducing coal import is part of the government’s plan to reduce the record current account deficit. A decision to this effect was taken at the prime minister’s office recently by a nine-member high-level committee, headed by coal secretary and having senior officials from the finance ministry, Planning Commission as well as the law ministry.
‘The Planning Commission has submitted the initial draft of the model concession agreement and the coal ministry is expected to finalise it in a month’s time after which they will invite bids from private players in December,’ a senior Planning Commission official told ET.
As per the proposal, the coal mine as well as the coal will remain in the ownership of the public sector while the private partner will receive a mining charge on the coal mined. The sale of such coal will be undertaken by the public entity, which grants the PPP concession.