A ministerial panel headed by home minister P Chidambaram is likely to meet shortly to iron out sticky regulatory and fuel pricing issues amid sweltering heat and a crushing energy shortage across north-west India that has left the country with a power deficit of about 14,000 MW a day.
Ahead of the meeting, coal minister Sriparakash Jaiswal, in an exclusive interview with Hindustan Times, hit back at power companies that blame state-controlled Coal India LTD (CIL) for fuel shortages that has hurt electricity generation.
“If any power plant says it is left with coal supplies that will last only a couple of days, then please ask them how much was the contracted quantity with CIL… and if that has been supplied by CIL then how can we be held responsible?” Jaiswal said.
CIL produces more than 80% India's coal and there is an estimated annual shortfall of around 70 million tonnes coal that needs to be met with imports.
About 30 power stations in India have just about a week's coal left to keep their furnaces burning to wheel out electricity, critical to keep the growth engine chugging in Asia’s third largest economy.
Worse, delayed monsoon rains have dried out reservoirs, prompting hydro stations to cut down energy generation Deficient summer rains, already running 22% below normal, have caused a spike in power demand.
Jaiswal said the government is examining the option of taking back the coal blocks from those power companies who have not yet started wheeling power from these captive fuel supplies.
“In fact we are de-allocating captive coal blocks to those power firms who have knowingly not started production,” Jaiswal told HT. “We have formed an inter-ministerial group who are studying and finding which are the coal blocks where production could have begun but has not been done till date…we will de-allocate all such coal blocks. There are 58 such coal blocks that has gone to the inter-ministerial group.”
Power companies maintained inadequate coal supplies from CIL cannot be bridged with imported fuel because of high prices.
“We are ready to import coal but as it comes at a higher price, no state wants to buy costlier power generated on imported coal,” said a leading private producer. “No power producer will suffer losses to generate this costlier power.”
Jaiswal said domestic coal production can be increased “only to an extent,” adding coal production increased by 6.5% in 2011-12.
The government has been under attack over a leaked Comptroller and Auditor General (CAG) draft report that said about 100 private and some public sector companies unduly benefited from the allocation of 155 coal fields without auction between 2004 and 2009.
The first meeting of Chidamabaram-headed nine-member group of ministers will examine the draft coal regulatory bill.
The Bill, which the Cabinet had discussed in May and decided to refer it to a group of ministers, seeks to set up a regulator empowered to decide on coal blocks’ allocation in a transparent manner and on terms including the price at which coal will be sold.
Besides Chidambaram and Jaiswal, environment minister Jayanthi Natarajan, planning commission deputy chairman Montek Singh Ahluwalia, power minister Sushil Kumar Shinde, mines minister Dinsha Patel, corporate affairs minister M Veerappa Moily, labour minister Mallikarjun Kharge and law minister Salman Khurshid are the other members of the group of ministers.