‘Govt should encourage CIL to explore new coalfields’
Bahadurjeet Singh /Rupnagar
Government should encourage Coal India Ltd. (CIL) to reinvest their surplus resources on exploring and developing new coalfields, instead of forcing them to pay high dividends to the center thereby reducing their capability to plan their growth on a long-term basis, said EAS Sarma, former Power Secretary, in letter written to the Coal Secretary.
He said that last year’s coal crisis severely impacted the power sector, especially the performance of the Discoms operating within the State sector. With the shortfalls in coal supplies, the Discoms were forced to import coal at exorbitant prices, which in turn escalated the price of electricity.After the 2021 coal crisis, the Power Ministries failed to plan the coal supplies more diligently thereafter and, the power utilities across the country are once again staring at yet another debilitating coal crisis this summer.
Sarma writes that CIL and the Singareni Collieries Company, ramped up coal production to ward off the shortages to the extent possible. On the other hand, it is the private companies that have been awarded captive coal blocks that have badly let down the coal sector.
He said that there are at least 43 captive coal blocks with the private companies, with a peak production capability of 145 MMT per year. During 2021-22, they produced around 54 MMT, and to meet their captive requirements, many fell back on coal supplied by the CIL.
It may be mentioned that many promoters of the companies developing the captive coal blocks are also those who own overseas coal mines. These are the companies quoting exorbitant import coal prices to the state power utilities, citing the tight coal supply situation globally. The greed of the private Indian coal traders is obviously crippling the Indian economy.
He said that the state power utilities are unable to procure domestic coal on the one hand and unable to pay the astronomical prices quoted by the Indian coal companies from their overseas coal mines. Recently, the Andhra Pradesh utilities have canceled the proposal to import coal,and instead went to face a severe power shortage in the state.
Sarma further states that the irony of the privatization of coal is that the private bidders do not bring any additional financial resources for the government, as they borrow largely from the banks.
V K Gupta Spokesperson for All India Power Engineers Federation (AIPEF) said that they have forwarded Sama’s letter to PMO and concerned ministries, as there is a need to revisit the privatization policy of coal development.