Since Coal India has some blocks that are in the final stage of clearance, why not a decision be taken to set up a power plant at the mining site? Such a plant would be able to eliminate the transport logistics, ensure continuous supply of coal and it would be able to make the cheapest power in the country
 
Coal India (CIL) chairman Narasing Rao’s exclusive interview in a business newspaper made interesting reading on Wednesday. This dynamic chairman has called for the government to identify India's coal reserves as “sovereign property”, perhaps in line with other natural resources such as oil, gas, thorium, etc. And rightly so.
 
We must admire him for his courage and humility in accepting that the private entrepreneur is better endowed with freedom and resources to tackle issues as compared to government servants, whose stake, unfortunately, is restricted to pay cheques and retirement benefits!
 
He refrained from commenting on the methodology followed for the coal block allotments made, but freely admitted that some of the blocks given to Coal India in this manner were taken back, due to lack of activity. CIL was not spared, because it was a government sponsored company.
 
He supported the view that private firms were of immense help in the coal production process, whether was in terms of overburden removal or in taking the responsibility as mine contractors.

Narasing Rao has indicated that CIL was in the process of identifying some 15-16 coal blocks and hopes to develop these in partnership with private contractors. He estimates that this move is likely to enhance the coal production by 60-70 million tonnes by the Fifth Plan period.
 
It is well-known that the coal industry has too many hurdles to cross, principally from state governments besides the ministry of environment and forests (MOEF). Issues like land acquisition, rehabilitation and resettlement, forest clearance, etc have a vital role before permission can be obtained for commencement of work. He had stated earlier, in yet another press meet, that as many as 45 applications were in final process with MOEF, out a total of some 158, work on many of which would start, in right earnest, when clearance is given.
 
During the current Five Year Plan, CIL would be incurring a capex of Rs26,000 crore in order to expand coal mining operations. It would appear that this is in addition to the Rs7,500 crore earmarked for the railway infrastructure work planned, because transport logistics has been playing havoc with the movement of coal from pitheads.
 
Many of the power plants that heavily depend on CIL supplies are always short of coal and have less than 15 days inventory which has been mandated. Work on the dedicated rail corridors is chugging along in the same speed and manner of goods train, much to the chagrin of power plants.
 
With the Inter-Ministerial Group deeply involved in sorting out the issues with 58 out-of-turn allottees and going into the details of the progress they have made, before deciding if the work on the allotted coal blocks has been unsatisfactory to withdraw the benefit, CIL, also a victim, is at cross roads, bearing heavy responsibility as the premier supplier of coal to the country. What should it do?
 
While the issue of increasing or maintaining the private partnership with the industry is well taken, it is time for CIL and its board to think out of the box. It may be recalled that the board had marathon sessions to decide the FSA (fuel supply agreement) issue; this was followed by the question of uniform price, based on imported coal, with a number of units opposing such a move. These issues have to be still sorted out, when the Coalgate brought everything else to a halt!
 
Now, here is a radical proposal that the board of Coal India might like to consider seriously.   Since it has some coal blocks that are in the final stage of clearance, why not a decision be taken to study a proposal to set up a power plant at site, by spinning off to a Coal India Power?  Such a plant would be able to eliminate the transport logistics as a start; continuous supply of coal would be guaranteed; work could start for a connection to the power grid, and it would be able to make the cheapest power in the country. All the indigenous suppliers of equipments would be happy to ensure that their components are delivered on time, and considering the usual time frame in starting the mining operation, such an establishment of the power plant at the mining site would be a boon to the country.
 
Surely, Narasing Rao can accept such a challenge as he has the experience, knowledge and capability to deliver the goods!

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US. He can be contacted at [email protected].)