Coal news and updates

There is obviously no dearth of vested interests who, overlooking the larger national interest, would do anything to stymie their business rivals. The case in point is the ongoing coal scam and what flows from it almost daily. Ever since the Supreme Court cancelled en bloc allotment of coal blocks on grounds that these were made on extraneous grounds, there has been a flurry of activity. Though every allottee is keen to hold on to the allotment, the government has most sensibly pleaded in the apex court that only those blocks which are ready for production or about to do so ought to be spared the axe. There are 46 such blocks. The court should have no problem accepting the government plea, given that what is of utmost importance is the need to ensure that power plants do not shut down for want of coal.

 

It is to be noted that some of the power plants have coal supplies for less than a week, while others have for a couple of weeks only. Since it is not easy to contract and procure imported coal at the press of a button, the need to ensure that there is no disruption in the supply of coal for power plants should supplant all other factors. The cancellation of all other wrongly allotted blocks is justified because hardly any steps have been taken to implement these projects for actually producing coal. But the 46 the government wants to save have made ample progress, with a majority of them now actually producing coal while the remaining few should begin to do so in a few weeks’ time. Even the SC cannot be so shortsighted to allow the waste of huge financial and other inputs, though the paramount reason for not cancelling these allotments has to be the need to ensure uninterrupted supply of coal for power generation.

 

Being a power-deficient economy, nothing should be done to make the power supply further scarce. The public sector Coal India Ltd, in fact, bears a great responsibility in ensuring uninterrupted coal supplies to the power plants. Under a new formula thrashed out by the energetic Coal and Power Minister Piyush Goyal, CIL, has undertaken to meet 65 per cent of the requirements of new power plants and 90 per cent of the old plants. Since imported coal adds to the cost of power generation, any gain to power plants from the assured supply of domestic coal by the CIL ought to be passed on to the consumers, especially by those plants whose power rates were sanctioned on the basis of costlier imported coal. This way, any charge that the substitution of domestic coal for plants based on imported coal grants them undue favour would be easy to demolish. The government’s sole interest is  to ensure uninterrupted power generation.

 

 Meanwhile, the decision to sell the government stake in CIL, besides in a few other public undertakings, has not come a day too soon. CIL has been a hub of corruption, inefficiency and political and bureaucratic influence-pedalling. Successive governments have failed to ensure that the public sector monopoly runs on professional lines. Though the government has decided to sell ten per cent of its 89.65 stake to raise over Rs. 23,000 crore, it is hoped that further disinvestment would help imbue a sense of corporate culture and responsibility in the so-called Navaratna. Ideally, the government should consider privatising coal in order to exploit most efficiently the vast reserves for the larger benefit of the people. CIL has been a laggard insofar as it has failed to keep up production to meet the growing demands of  the national economy. That we have had to import coal worth nearly Rs 90,000 crore in the last financial year underlines the inbuilt infirmities in the management of CIL. Should the government succeed in handing over the management of CIL to professional managers free from daily interference by political and bureaucratic bosses, it may not be hard for it to meet the growing demand for coal without forcing power producers to import far more costly coal.

 

 

Source: http://freepressjournal.in/