Draft coal policy discourages export

NewAge, December 10, 2007. Dhaka, Bangladesh The coal advisory committee on Sunday finalised the draft coal policy, discouraging coal export but without changing the existing royalty rate of 5–6 per cent on extracted coal.The committee, headed by former BUET vice-chancellor Abdul Matin Patwari, on Sunday had another round of debate on setting a new rate of royalty but failed again because of the continued difference of opinion among the members on the issue. The committee holds its last meeting Friday to complete the editing of the final draft.At Sunday’s meeting, the committee finally decided to stick to its previous meeting’s decision that the proposed coal sector development committee, headed by the power and energy minister, would set the royalty rate time to time considering various issues like coal extraction cost, price of coal on the international market, electricity generation cost, and total income of the government.So, until the development committee sets a royalty rate, it will continue to be 5–6 per cent. The draft policy does not specify any timeline for the development committee to set a new royalty rate for local use of coal either.The policy, however, does not say anything about the royalty rate on coal export. The policy says there will be ‘no scope for coal export’ with the existing reserve of coal, with which the domestic demand can be met substantially till 2030. ‘But, if any new gas and coal field is discovered in future then the government can consider the export issue, considering the demand-supply situation, after ensuring the country’s energy security for 50 years and based on the recommendations of the coal sector development committee.’At Sunday’s meeting, Professor Nurul Islam of the Bangladesh University of Engineering and Technology proposed again that the advisory committee should set the royalty rate at 14 per cent.The University Grants Commission chairman, Nazrul Islam, and Professor Badrul Imam of Dhaka University seconded the proposal. But Infrastructure Investment Facilitation Centre executive director Nazrul Islam, Petrobangla director Maqbul-E-Elahi, Centre for Policy Dialogue executive director Mustafizur Rahman and journalist Ataus Samad opposed it, meeting sources said.Nurul Islam then proposed that a provision should be included in the policy that, in setting the royalty, the government’s share in the income from a coal field should be at least 30 per cent.Nazrul Islam, Maqbul, Mustafizur, and Ataus Samad again opposed the idea, saying that 30 per cent income for the government was too high and that it would result in a high power tariff, the sources said.The draft policy stipulates that the proposed state-run holding company Coal Bangla or any other relevant state-run organisation will get exploration and mining licence of coal fields and be able to explore and develop coal fields jointly with private and foreign companies.The policy has another provision for developing a small-scale open-pit mine to test the viability of the method in the country. ‘If the result of the open-pit mining method is satisfactory, the method can be used in other fields for commercial extraction of coal,’ the policy observes.


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