Coal block allocation: Steps to precipitate action?

Once the coal block discovery and its potential is made, both the state and the environment ministry must undertake a detailed study and draw up a checklist of dos and don’ts that need to be done, correct the situation, and only then make the block available for use

According to a statement made by coal minister Sriprakash Jaiswal and later on reiterated by prime minister Dr Manmohan Singh, it is not possible to simply issue a cancellation notice or order for the coal blocks given earlier. There are certain rules and procedures to be followed in such cases.
At the moment, Sriprakash Jaiswal said that an Inter-Ministerial Group (IMG) is reviewing the 58 allocations made and these recipients have been issued show-cause notices for delaying the mining process, as only one unit had actually gone into production. Besides, a CBI (Central Bureau of Investigation) probe was on to investigate if there were any irregularities in connection with these allocations.
The IMG is expected to submit its report (or, shall we say, its findings) by 15th September, after which a decision can be made on the cancellation issue.
At this point of time, it is apparent that once the licenses were issued, no one really took interest, in the various departments and ministries to keep a watch on the progress actually made at the mining sites. Also, if the allottees had any serious problems and bottlenecks, such as those generally charged at the state-level or at the MOEF (ministry of environment and forests), these were not made public. So, everyone, who should have really been concerned, was really in the dark!
 In fact, the whole story broke out only after CAG (Comptroller and Auditor General of India) report was made public, from where the public came to know of the staggering sums of money, which are claimed to be “windfall gains” surfaced.
In his defence, finance minister P Chidambaram claimed that the ‘coal’ was in mother ‘earth’ and so there was no ‘loss’ as such. On the other hand, if everything was working well and at full swing in the mining operation, not only the allottees would have made huge profits (windfall gains) but the government would have also received taxes on these besides other forms of levies that may be applicable at the time of production and despatch!
Therefore, the whole issue is debateable, depending on which side you are on!
Press reports also indicate that Sasan Power, a unit of Reliance Power, has also received this show-cause notice, being one of the 58 blocks, under review by the IMG. It may be recalled that Sasan is an UMPP (ultra mega power project) with a 4,000 MW capacity, in which production has just started, based on coal supplies from Moher and Amlohri mines in UP, which are expected to supply some 20 million tonnes annually, after reaching the fourth year of production.
The first Sasan unit with 660 MW capacity is scheduled to go on stream by the year end.
According to Anil Ambani, chairman of Reliance Power, Sasan UMPP will be able to supply power @ Rs1.19 per unit, the lowest for any coal based project in the country. If this is actually maintained, there is no reason why, this company should not be invited to take the lead in putting up other similar plants elsewhere, or, at best, to expand the Sasan capacity, since it has become operable?
Meanwhile, the 58 allottees, who have received show-cause notices, have to provide necessary information that they have been asked to submit to IMG, from which it will be clear whether they have started their spade work or are stuck deep in the mud due to hurdles raised at state or MOEF levels. If so, what is the progress they have made since to obtain the required clearances, so that work can commence?
The unfortunate pity is that this kind of debate will go on endlessly, with each side trying to apportion the blame on the other and forget to focus on our urgent and imperative need to get power via coal, at the moment!
What is the solution?
It should start from the beginning itself. Once the coal block discovery and its potential is made, both the state and the MOEF must undertake a detailed study and draw up a checklist of dos and don’ts that need to be done, correct the situation, and then make the block available for use. Then, and then alone, the block should be offered for sale by auction, stipulating various deadlines to be carried out, including the time-frame to start and target production figures for actual delivery. At the moment we are putting the cart before the horse, and let the successful bidder of the block fend for himself, and start the hurdles race, which is tougher than the Olympic standards.
The Railways should be involved in advance planning for dedicated corridors to various industrial sectors, or to the specific location, if it is a linked power project; Power Grid Corporation of India should be involved for arranging the link to the national grid, so that it becomes an eye-opener to all.
Simply making promises and assurances will not get us anywhere. We need to deliver goods and power is in urgent need.

(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].)

Free Helpline
Legal Credit