GMR group unit GMR Energy is investing around Rs18,000 crore over the next three years to add electricity generation capacity and become a 3,300MW company. Raaj Kumar, chief executive officer and director, GMR Energy, talks with Moneylife’s Amritha Pillay about the coal supply situation in the country
Amritha Pillay (ML): Coal-producing regions in India are facing some serious problems like the Naxalite insurgency. Coal India Ltd (CIL) has admitted that it has been unable to transport coal from its mines from Jharkhand and Orissa. GMR Energy has also been allotted a block in Orissa. Do you think that the Naxalite movement poses serious problems for India’s coal production?
Raaj Kumar (RK): The government is handling the Naxalite problem in a systematic manner. From the current situation to the time we will extract our first coal ingot from our Orissa mine, there is plenty of time. We hope by that time, the Naxalite problem will get resolved. Also, the country needs coal for power projects. This is linked with development, so there may not be any roadblocks.
As far as GMR is concerned, we do not foresee any problems in developing the Orissa mine and transporting the coal from these blocks to other places.
ML: What is the current status of the Orissa coal block allotted to GMR Energy in 2008? Will the delay in coal mining affect your power projects?
RK: For the Orissa coal block, we have already formed a joint venture company. Usually for any mine, pre-development activities take around two-three years’ time and we need a number of clearances like forest, exploration and environmental clearances. The process is going on. As far as our power project is concerned, the work is going on as per schedule. Since we have sufficient coal linkages in place, our power projects will not be affected due to delay in coal mining at the Orissa block.
ML: State-run CIL has been trying to ensure continuous coal supply across the country. Do you think CIL’s efforts are enough?
RK: CIL is looking to import substantial quantity of coal from abroad, so I think these steps would take care of coal supply in the medium to short term. However, I personally feel that CIL should seriously think of improving its productivity and also undertake more underground mining.
ML: A number of power companies have raised money from the capital market for expansions. But do you think that these companies have overlooked problems like the coal supply shortage?
RK: We have been hearing that there is a coal shortage. However, with all the action that CIL is undertaking, inclusive of the support from imported coal, coal shortage is a temporary problem and I am sure coal shortage will not come in the way of power projects.