The tendency to obtain prized allocations for much-needed coal but not do any development work causes legitimate users to suffer and national progress is impeded. Lame excuses will no longer be tolerated

Last year, Union coal minister Sriprakash Jaiswal finally took the bold step of de-allocating coal blocks and encashing the bank guarantees of the allottees, most of whom had done nothing after getting the blocks, though the general excuse was that they were unable to get ‘clearances’.

Anyway, so far, there is no news if the de-allocated coal blocks have since been re-allotted to others, and if so, to whom and how? It is also not clear as to whether the ministry would strictly enforce time-frames for the new allottees to operate the mines.

In a separate development, power companies, which have been allotted coal blocks, must now sell electricity through distribution companies (Discoms) only on a long-term basis. They should sign Power Purchase Agreements (PPAs) with Discoms at least six months before commissioning the plants.  This rule is mandatory for those who are likely to commence production shortly or within the next 18 months.

Such a move will ensure that the cheap indigenous coal supplies actually and directly benefits the consumer who would be able to obtain power through these Discoms.

After the strong step taken last year to de-allocate coal blocks, the coal ministry last week announced that it has issued show-cause notices to 12 companies, including government owned organizations, as to why they have not commenced their operations.  Apparently, several meetings have been held in the past for finding the causes for this inordinate delay, and finally the Inter Ministerial Group (IMG) found progress so unsatisfactory that they ensured such show-cause notices to be sent.

This tendency to obtain prized allocations for much-needed coal but not do any development work causes legitimate users to suffer and national progress is impeded.  The standard excuses for not doing any work at site is to simply claim that ‘approvals’ and ‘clearances’ are in ‘process’ and or not received. This sort of lame excuses will no longer be tolerated.

In fact, these 12 coal block allottees have been given time till 30th June to submit the reasons for non-performance.  No doubt, this time also, the ministry will ensure the encashment of bank guarantees.

Hopefully, an independent agency will be appointed to investigate the ‘real’ causes for such delays and dig deep into the root cause of the problems relating to ‘clearances’.  Are these, truly, technical, involving too many cumbersome and difficult formalities, or those created by corrupt officials demanding their pound of flesh?

In the meanwhile, where mining operations are going on at reasonable pace, the new problems faced by some power generating units in Gujarat and Rajasthan have cut down their daily off-take to 12,000-15,000

tonnes of coal a day, as they now want to truck this thermal coal from Chhattisgarh mines to coal washeries for cleaning before delivering the same to railway sidings.

It appears this operational logistics involves laid down procedures of tendering for trucks, causing delays for Coal India (CIL). There are two steps that CIL can take to resolve such issues.  Either it owns a fleet of trucks (or expand its existing fleet, if it already has one, and not depend upon fleecing contractors), and or additionally set immediate goals to lay railroads to washery sites and move on to the final destination.  Lower intake of coal from pitheads will only slow down production and create congestion and overstocking there.

Time is the essence of the contract, and to overcome these site difficulties and reduce transport logistics, the railways must lay additional tracks expeditiously.

The one good news is that international coal prices are coming down to $80 per tonne, but, our problem continues to be the transport logistics that need to be resolved without any further delay, and assist CIL to overcome their current impasse.

 (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.)