A novel idea could be to announce the names of selected winners of the coal blocks, and provide a time frame of 30 clear working days within which, if anyone has any objection, he must subject the details, in writing, for a public scrutiny and debate
 

In the last one week, several issues relating to the coal industry have come into prominence.

First refers to the increased profits realized by Coal India Ltd due to higher volume and the profit soaring to Rs17,356.4 crore for the year ending 2012-13.  Production rose to 452 million tonnes (mt) but the despatches were higher at 465 mt due to apparently stocks lying at pitheads. Production target for current fiscal is at 492 mt.

CIL has also brought about change in the coal prices directly in relation to gross caloric value (GCV).  Those in the GCC of 6,000 to 6,300 will get a reduction of 12% while grades 2,200 to 6,000 GCV will be increased by 10%, with the effective average resulting in a 4.75% increase in coal prices.

Second concerns the original plans of CIL, who really do not have a direct experience, to import 16 to 20 mt of coal due to the projected shortfall in indigenous coal production, and imports are arranged upon firm requirements being received from the consumers (power generators).  The question of fuel supply agreement (FSAs) and the pricing mechanism have also been subject to various debates.

The Central Electricity Regulatory Commission (CERC) has categorically stated that CIL should meet full requirement under FSAs with power utilities. Although coal prices have softened a little bit overseas, in actual practice, when requirements are floated, prices tend to go up and getting competitive bids for freight at short notice are also not practical and certainly not recommended. Overseas suppliers are not in a tap, which can be opened and or closed at will and there is no guarantee that sudden heavy rains would not flood mines leading to an extraordinary situation of short supply from indigenous sources. We need to establish adequate stocks for such emergencies.

Thirdly, the issue of quality of coal supplied to NTPC by CIL has been a matter of dispute, leading to payment delays by the power producer. In the meanwhile, it appears that Coal Ministry has objected to the Power Ministry raising the issue of coal quality (GCV) after NTPC has been consuming coal from the very same source for its requirements for several decades now!

CIL has shown its willingness to have quality control and assessments made at the mine but not after delivery to NTPC.  It is essential to arrive at a mutually agreed quality inspection mechanism while considering the purchase of washed coal, which may be marginally higher in price, suggested by CIL, but at least the quality will be assured, and there would not be any power blackouts!

In the meantime, the Power Ministry and Central Electricity Authority (CEA) have started the processing of applications, received for the 14 coal blocks, located in different states - five in Chhattisgarh, four in Odisha, two in Jharkhand, one each in Madhya Pradesh, Maharashtra and West Bengal. Although 235 valid applications were received, only 126 are in further process-consideration to allocate these 14 blocks, which include public sector units (PSUs). It seems the Ministry of Power and CEA will take into consideration the state priorities for proposed thermal power projects and evaluate other logistics before making a decision to allocate these 14 blocks.

What is required, in the entire process, is TRANSPARENCY and above-board dealing, so that no fingers are raised, and no delays in allocation. In fact, a novel idea could be to announce the names of selected winners of these 14 blocks, and provide a time frame of 30 clear working days within which, if anyone has any objection, must subject the details, in writing, for a public scrutiny and debate.  The usual muck must stop here, by this process, because scams and scandals break out years after an 'event' is over!  Let's start something new, with a clean slate, can we?

Separately, Coal Ministry plans to auction seven coal blocks for steel, cement and iron units.  These seven blocks have in place reserves of about 14 million tonnes per year and identities of these have not been made public so far.

One of the major hindrances in the movement of coal from pitheads to the consumer's site has been inadequate availability of rakes, delays in transit, loss/ theft in transit and non-availability of dedicated rail corridors for movement.

And the good news is that Larsen & Toubro (L&T) along with SOJITZ Corp of Japan are likely to be awarded the contract to design and construct a 640 kms twin-track stretch between Rewri in Haryana and Palanpur in Gujarat, estimated to cost Rs6,700 crores. This dedicated freight corridor is part of 1,483 Kms Western Corridor proposed between Dadri (near New Delhi) and Jawaharlal Nehru Port (JNPT) in Mumbai. This entire project will be financed by Japan International Cooperative Agency (JICA), and the approval for this award is expected in the next few days. In this case, fortunately, land has been acquired, all other clearances including environment and forests are on hand.

Further details are expected shortly, but the expeditious completion of the corridor will greatly relieve the movement in the Western sector, and indigenous coal production and supplies will increase as a result.

(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.)