The shortage of coal is keeping power plants on tenterhooks. The shortage of coal has emerged as a major constraint in the generation of electricity as CIL has not being able to assure power plants of ability to supply 80 per cent of their requirement in the fuel supply agreements as directed by the Prime Minister's Office. CIL has stated that it is capable of supplying only 65 per cent of the requirement of power plants and they will have to plug the remaining gap through imports.
Regarding this problem, a meeting was held last Friday at the PMO, where they scaled down Coal India assured supply agreement to 65% under fuel supply pacts with power companies and the remaining will be met through imports. However, the company will have to pay damages, equivalent to 10 per cent of the value of the shortfall in supply to the power producers. Having said that, imports need not become the answer to problems in developing domestic coal. Domestic issues must be addressed at war footing but in the mean time, imports can serve as a temporary solution.
On the other hand Coal India, which is under continued pressure to increase the domestic coal supply, has 100 proposals held at the various levels for the environmental clearance. A meeting was also scheduled on July 13, 2012 at Nagpur to discuss the issues in the Parliamentary Consultative Committee. It is estimated that if these projects gets clearance, Coal India will be able to mine additional 105 Million tons in the current fiscal year. Out of these 100 projects, 25 are in the final clearing stage, in which mining operation can be commenced immediately. But as usual the fate of these 25 projects is still not known.
The backlog of environmental and forest approvals has become one of the major hurdles to Coal India's mining more fuel. The then, Finance Minister had suggested, that Ministry of Environment & Forests should constitute another advisory committee for clearing the backlog. The approach is
good, but the implementation of the same is doubtful. According to Central Electricity Authority 1, 00,000 MW capacity projects are in the pipeline but the issue is from where will they procure fuel?
Well with due respect, constituting more committees or advisory boards will not serve the purpose because problems are well known and need no repetition. The solution is not only clearing the mining projects but to analyze why these projects are delayed? As we have seen in the past, there is a complete lack of consensus among the ministries. Prevailing situation necessitates that there is a need to take consensus approach by the concerned ministries so that the projects are cleared. Apart from this using the 'stick' approach only on utilities is also not justified because they also have some limitations. The approach must be extended to the concerned ministries as well so that burden will be shared equally. This is a national issue not the utility or ministry specific.
The above approach does not intend that we doubt our bureaucratic competency but the idea is to provide a level playing field to our major coal miner so that every time they are not singled out to be put under the hammer.
Ashish Gupta, Observer Research Foundation