It is time that the government announces a more lenient policy towards power related programmes. Why not give the oil and gas exploration industry a free hand instead of creating stumbling blocks?
It is common knowledge that power is in short supply. The public is also aware that the path to increase production of power is full of potholes, government hurdles, creation of unnecessary and avoidable intermediary clearances and the actual time frame required before power can be generated. Meantime, the demand for power grows by leaps and bounds.
Take the primary source of coal supplies needed to generate this power. The monopoly, Coal India, through its various mining units obtains coal of various grades. These, or at least a substantial portion, lie at the pit heads due to transport logistics. The Indian Railways is unable to move all the coal mined and deliver it to the required sites.
Why can’t we have power generating plants at the vicinity of coal production areas is still a mystery and no one has bothered to comment or shown willingness to set up such a unit. Why not induce and encourage the concerned state governments to take the responsibility of setting up such power plants to make their own state self-sufficient or become a surplus producer, willing to pass the power generated to the neighbouring states?
Indigenous coal is insufficient to meet the national demand resulting in imports from various countries at higher prices. These have different grades in terms of caloric value, naturally higher in price as compared to their indigenous counterparts, and the coal price pooling arrangement proposed is not acceptable to all. Besides, this procedure is also not considered a panacea to our problems. The tug-of-war between NTPC and Coal India does not appear to be anywhere near an amicable solution.
According to media reports, efforts by Coal Secretary, SK Srivastava, to settle the payment dispute between two CMDs, Narasing Rao of Coal India and Arup Roy Chowdhury of NTPC is likely to affect the consumers, though Rao's offer to have a third party quality inspection at mines for determining the caloric value looks reasonable; but to expect this matter to be resolved in the next few months, so as to permit the system to be in place is not acceptable. Why not appoint an arbitrator and set a time frame of 30/60 days to settle the issue?
Why this inordinate delay in FSAs and what is is preventing the government to give clear-cut directives on these matters?
In the meantime, two significant events have come to light that in the very near future may help to reduce the tension in power generation area.
Press reports indicate that, at last, Reliance Industries has got some good news emanating from its D-6 block. Preliminary reports suggest that, indeed, gas has been found in the D-6 block, but this is too early to predict the outcome as several site tests will have to be carried before the potential can be ascertained.
With the assurance of the petroleum ministry that the Comptroller and Auditor General of India (CAG) will conduct only an ‘audit’ as per the production sharing agreement, there is apparent enthusiasm at RIL that work will be carried without much hindrance and there is a glimmer of hope that all the four satellite fields, coupled with R-series discovered in the D6 block may yield up to 30 mmscmd additionally.
By a sheer coincidence, Cairn India has struck fresh oil in the Barmer block in Rajasthan. This joint venture with ONGC had originally surrendered area in this block which, now they want to re-explore, which appear to have potential.
Cairn presently produces 175,000 barrels per day and feels that the basin and has the potential to increase it to 300,000 bpd. But this will be only possible when government clearances are obtained to carry out the exploration work aggressively, bearing in mind that the time-frame to achieve this target would still be around three years.
It is time now that the government announces a more lenient policy towards such power related programmes. Why not give the oil and gas exploration industry a free hand instead of creating stumbling blocks?
(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.)
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