The government has defended the delay by some private companies in starting mining in blocks allotted to them by blaming lack of various statutory clearances. But this argument runs contrary to what the coal ministry had told the Comptroller and Auditor General during its exit interview on the coal reports when asked why these blocks allotted in a rush to step up production remained unmined.

Then Mr Alok Perti coal secretary during the exit interview of the ministry with top CAG officials on February 9th 2012 had said that the private companies lacked expertise to mine and their attempt to find a foreign partner failed as these firms wanted a stake in the coal produced which was not allowed by the ministry for lack of such provision under the captive consumption agreement.

Mr Perti said CAG officials, giving reasons why many of the 57 private companies in question had failed to start operation that "There was lack of expertise in the private sector for mining and foreign parties were reluctant to come unless they were provided a part of the coal production. In fact, sharing of coal was not allowed under allotment of mines for captive consumption.

He said that this admission points to lack of due diligence on companies that were allocated vital national resources many of them were not competent to be allocated mines since they had no expertise in mining and had not provided any assurance how they will achieve this task once mines were allocated to them.

With the opposition demanding a response from the government on the due diligence adopted for applicants it will be difficult for the coal ministry to explain how the allocations served the purpose of augmenting coal supplies for captive plants the ground on which mines were allocated.

Private companies were allocated coal blocks for captive use to facilitate capacity addition for power generation in the country. The allocations were done on the recommendation of the Energy Coordination Committee, under the Prime Minister's Office, which was of the view that capacity increase would help in enhancement of power generation. Thus, private companies were favoured with new blocks over public sector undertakings. In some cases, even blocks were de allocated from PSUs and given to private companies.

On another specific query during the exit interview whether there were issues relating to coordination with other ministries which affected augmentation of production of coal, the then coal secretary said better coordination with the power ministry was required. Online application for various statutory clearances like environmental and forest ones that would further cut down on delays and facilitate speedy approval.

Under attack from the opposition, the government is in the process of reviewing mine allocations to companies that have defaulted on starting operation. De allocations of these mines are not ruled out with the Inter Ministerial Group on coal meeting on Monday to discuss the issue.

Source - Times of India.indiatimes.com

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Policy/Steam/India