By 2017, the demand for coal will reach a staggering 980 million tonnes whereas the supplies are expected to touch not more than 795 MT. There is, therefore, the urgent need to handle the issue in a war footing rather than admitting that there are delays due to factors of our own making—such as state government, ministerial and environmental clearances and so on

According to IA Khan, Planning Commission's Advisor on Energy, India is likely to have a shortage of 200 million tonnes (MT) of coal by the 12th Plan period, unless efforts are made to increase the indigenous production.

By 2017, the demand for coal will reach a staggering 980 MT whereas the supplies are expected to touch not more than 795 MT.  We are overlooking one important aspect of growing affluence in the country which generates the demand for hundreds of consumer items that need power to use them.

There is, therefore, the urgent need to handle the issue in a war footing rather than admitting that there are delays due to factors of our own making—such as state government, ministerial and environmental clearances and so on. Land acquisition problems created by vested interests have also added to the growing number of problems that have retarded progress in this area.

First of all coal production is under the government monopoly in the form of Coal India.  The ministry of coal wants to maintain its status and has issues with ministry of power and railways.  The Indian Railways, for example, is unable to make available rakes, remove mined coal from pitheads, has problems with laying new rail lines and has inordinate delays in building “dedicated rail corridors”. The construction and the speed in doing all these activities leave much to be desired.

Coal India, for example, has subsidiaries that mine the coal at various locations. Since it has a great number of such units, for a preliminary study, let us take a look at Eastern Coalfields (ECL), formed in 1975, which inherited all the private sector coal mines of Raniganj coalfields, and mines non-coking coal.

According to its website, it operates 24 open cast mines while 81 are underground, employing 78,005 people including 7,094 women in its operations.  Its proven coal reserves are 12 billion tonnes (BT) in West Bengal and 4 BT in Jharkhand, while the estimated reserves are at 47 BT. There is enough coal to meet our increasing demands.

While the current production is 30 MT (in the 2011-12 period), at the time of nationalization of Raniganj coalfields, the production was 21 MT in 1977.

This unit is under the able, technically qualified mining engineer Rakesh Sinha, its current CMD, who had joined Coal India in 1977, held various positions, before being ultimately transferred to Eastern Coalfields in 1989 and was appointed CMD in 2010.

Statistical data shows the progress that ECL has made under his leadership, no doubt, mentored by the holding company, Coal India, whose dynamic chairman S Narasing

Rao has taken keen interest in its progress.

ECL, like other subsidiaries of Coal India, knows that despite the good work put in by it, the company is unable to make great strides in the last few years simply because:

a) it is awaiting forestry clearance for more than five years
b) the demand expectations from project-affected persons have considerably increased.

Other issues, such as abandoning uneconomic mines, introduction of mechanized loading equipments, use of more modern and sophisticated equipments where possible, reduction in overall costs and improvements in safe mining techniques including training programmes are being done in a phased manner.

But what is the root cause for inordinate delays in the clearance from the ministry of environment and forests?  Why should this be pending for five years? Moneylife has raised this issue earlier also and has repeatedly recommended the imperative need to have tripartite meetings of the ministries concerned to resolve the issues.

Simply passing the buck by constituting committees is not getting us anywhere.

The government must give an ultimatum to all concerned to resolve the issues or simply issue an ordinance and make it binding to put a stop to these inexcusable delays.

One other thought that has often crossed our minds.  Instead of government going ahead with disinvestment programmes, why not simply de-nationalize these companies and let them run as profit oriented centres?  Or, even before such a radical move is thought of, why not make these subsidiaries totally independent companies and given them a time-frame of a maximum of three years to achieve set goals of production?

(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.)