Need for urgent decision on the Coal Regulator

AK Ramdas 25 July 2012

India has one of the largest proven reserves of coal, but we are still forced to import the mineral instead of achieving production from indigenous sources. Surely this can be avoided

In the last few days more reports have appeared in the press that confirm public suspicion that, prima facie, some of the allottees of coal blocks between 2006 and 2009 were indeed given away these blocks due to undue favours. The Central Bureau of Investigation (CBI) probes are continuing.

Earlier, the draft report of the Comptroller and Auditor General (CAG) made a reference to the notional loss of Rs10.6 trillion as a result of the allocation of these coal acreages. Many of these allottees are blue chip companies.

What is more shocking is that no mining activity has taken place so far. To say it, ironically, allottees have not even scratched the earth, let alone digging the coal out!

It is therefore gratifying to note that, on the auspicious day of the presidential inauguration, when Pranab Mukherjee will be sworn in as the 13th president of the republic, the Group of Ministers (GoM) headed by P Chidambaram is likely to meet and discuss the Draft Coal Regulator Bill. The last meeting on the issue took place some two months ago in May.

Is it out of place to ask, why not the Draft Coal Regulator Bill be made public, so that all have access to information, and a sensible debate takes place on the issue, before it becomes a law?

It looks like, at the moment, we do not have a standardised rule for regulators in general. Obviously, the functions, scope, responsibility and goals would differ from one industry to another, but the least we can and should do is to have a uniform code which can be modified to suit a particular requirement.

As far as the regulator for the coal industry is concerned, why not take a bold step and give a carte blanche right to perform without fear?

We seem to be short-sighted in setting our target to achieve an additional requirement of some 160-170 million tonnes, which we are currently forced to import, instead of devising ways and means to achieve this production from indigenous sources. We have ‘developed’ mines and supply sources in other countries, be it Indonesia, Australia or Mozambique but are unable to do so in our own country which has one of the largest proven reserves of coal in the world!

Why not set a target of achieving an additional indigenous production of 200 million tonnes and envisage the prospect of being a net exporter rather than be a perennial importer? Can’t we learn from our foodgrain experience? In foodgrain production we have to depend upon monsoon, irrigational dam facilities, diversion of rivers, stop flooding and so on, whereas in the coal industry, we are not willing to go the extra mile and dig in deep?

One other factor that invariably comes up is the issue of approval or clearances from the ministry of environment and forests (MOEF) where hundreds of proposals are in the queue for clearance for something or other. Here again, local conditions, geography, etc play a vital role in deciding the clearance issue as much as the rehabilitation factor. Also political interference raises its ugly head often and disrupts progress.

Yet, a broad set of rules may be laid down and as clearances are individually processed for approval, the MOEF must give interim clearances to carry out tests at site to assess the viability of projects to avoid uncertainty and loss of time for the explorer. Delays of any kind must be avoided at all costs.

(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]

Comments

User

Rajan Alexander

1 decade ago

"As far as the regulator for the coal industry is concerned, why not take a bold step and give a carte blanche right to perform without fear?"

This is the right approach to effective management.If this approach is followed, a certain degree of mistakes and corruption need to be tolerated as human beings are not perfect.

Unfortunately after the Anna movement, there exists a decision paralysis. Leave alone coal, no one wants to take decisions. If you decide, you get targeted, if you evade decision, you get targeted and the consensus is better the latter than the former, at least your are not accused of corruption.

Part of the problem is that Jairam Ramesh reserved almost 1/3rd the coal fields as a no-gos. The El Nino - bringing rains in major coal producing countries have raised global prices. So importing coal involves higher energy costs