BL reported that ending CIL's monopoly is all very well, but that cannot ensure higher production. Relief and rehabilitation are a major concern.
With Coal India Limited lagging behind in its production commitments, the Union Government has recently come up with a policy assurance to fast track domestic coal production. This is in order to meet the country's energy needs.
While the intentions of the Government will be clear once the policy is in place, the industry has petitioned the Government to bring an end to CIL's monopoly over commercial coal production and allow a wider role to private capital.
Is there any magic wand to catapult the coal sector to higher growth? Or, has the Government created enough impediments to take the steam out of this sector, and is now desperately hoping that these obstacles will somehow disappear?
While there is little doubt that a monopoly is inefficient, a quick scan of the performance of the captive segment, which was offered as many as 219 blocks in the last two decades, will prove that the coal mining sector, as a whole, is in trouble.
NTPC, a relatively efficient PSU, which was awarded with eight large sized blocks between 2004 and 2006, is a classic example. This includes the mother of all blocks, Pakri Barwadih (2004), having a reserve of 1,600 million tonnes, nearly 10 times the size of an average block.
In terms of geological reserves, the power major was perhaps the single largest recipient of captive resources allotted so far. More than half a decade down the line, not a single block of NTPC has started production. As of June 2011, the Coal Ministry de allocated five blocks due to lack of progress.
NTPC is no exception. Companies, irrespective of their ownership pattern, have grossly failed to turn the captive assets into production. The failure is rightly brought out by the recent report of the Comptroller and Auditor General, which found only one block out of 57 allotted to private sector during 2004-09 to have started production.
Clearly, CIL is in a position to negotiate the land hurdle in Odisha. Yet, the company's production plans in the State lag way behind projections, courtesy the fiefdoms in the areas of environment and forests.
The miner waits at least for four or five years to get environmental and forest clearances. The waiting period often exceeds a decade, as in Garjan Bahal (10 million tonnes).
Source - Business Line
(www.coalguru.com)
User/Steam Coal/India
