India's foreign reserves came down to $294.4 billion at March 2012 from $311.5 billion at September 2011 end mainly due to RBI's intervention in the domestic foreign exchange market and effect of revaluation
State-run Sutlej Jal Vidyut will execute two hydro power projects, 600 MW Kholongchu HEP and 570 MW Wangchu HEP, in Bhutan in collaboration with Druk Green Power Corp
Foreign investors, who are wary of delays and uncertainties associated with project clearance, have reiterated their interest in participation in coal projects provided government sets up a workable single window clearance which works within a time frame
In the last few months Moneylife has extensively covered the ongoing problems relating to power generation, distribution and breakdowns. Poor and inadequate rains have added fuel to fire. Indigenous supply of coal is also insufficient but what is available at the pitheads, due to transport logistics, is not able to move fast.
Hundreds of proposals are stuck at the ministry of environment and forests (MoEF) or at state level on some ground or another.
What is really happening? Looks like nothing at all. And in any case, not at the speed at which the power-hungry aam aadmi’s needs or the way power generators conceived when they got into the projects in the first place. Also, some of them are equally guilty of not doing anything on the coal blocks offered to them earlier, on which nothing had been done for years.
Files are collecting dust and moving at a snail’s pace much to the discomfort of the public and projects attached to these schemes.
What should an enterprising investor do? Already, some leading power generators are smart and have had the wisdom and foresight to establish overseas supply sources. In fact, many of them have spent millions of dollars in buying and leasing mines in different countries such as Indonesia, Mozambique, South Africa and Australia. Others are now prospecting for supply sources in Russia and USA.
In a road-show organized by IDFC in Singapore, which was attended by a team lead by coal minister Sriprakash Jaiswal, the pulse of the foreign investors was they too would face the long delays and uncertainties associated with green clearance and land acquisition already faced by many Indian companies.
They have reiterated their interest in participation in such projects provided government moves in the direction to set up a workable single window clearance with a time frame. According to the information made available by Coal India, 133 of their proposals are pending at state levels and 45 at the MoEF, awaiting various types of clearances.
Even if a blanket clearance is given, hypothetically, it will take at least two to three years before commercial production can be achieved in various degrees in these sites mentioned above. Until then, Coal India has to continue its overseas purchases of 18-20 million tonnes of coal every year and try to manage and increase the indigenous production, tackle the issue of transport logistics and pray to avoid labour strikes in areas of contract labour associated with this industry.
The railway ministry, for reasons best known to them, have not made any dramatic announcements in regard to setting up dedicated corridors for facilitating coal movement, nor is it an overnight easy job to lay additional tracks alongside existing ones.
In the meantime, FSAs (fuel sales agreements) are still undergoing changes in regard to delivery commitments, compensation, import and indigenous product mix and uniform price levels. Not an easy or enviable task for Coal India at the moment while the country suffers from inadequate power supply.
Time is the essence of contract and there should be no more delays in settling the FSA issue.
(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].)