India to meet coal shortfall through imports in 12th Plan period

Tue, Nov29, 2011

NEW DELHI (Commodity Online): India will meet its shortfall of Coal at the end of the Twelfth Five Year Plan period through imports of coal by end users as per their requirement as coal is an item under Open General Licence (OGL), according to the Pratik Prakashbapu Patil , Minister of State in the Ministry of Coal.

Main reasons for shortfall in production include delay in environmental & Forestry Clearance of major projects, R&R issues & land acquisition problems, inadequate availability of railway wagons in different coalfields, Law and order problems and Excessive rainfall during the current year in major coalfields.

Production target and achievement during the Eleventh Five Year Plan i.e. from the year 2007-08 to 2011-12 (April – October 2011) is as under:-

During the 2007-08 fiscal, target was 460.50 mt (achieved 457.08 mt), in 2008-09, it was 497.29 mt (492.76 mt), in 2009-10, 532.33 mt (532.04 mt), for 2010-11, 572.37mt (533.08 mt), for the current fiscal 554mt (262.03 upto oct 2011).

Mean while the India Government has allocated 43 coal blocks during the last three years and the current year. But none of these coal block allocated have come into production, according to the Minster.

The Minister said that one of the conditions of allocation of coal block is that coal production from the blocks shall commence within 36 months (42 months in case the area is in forest land) in case of open cast mines and within 48 months (54 months in case the area is in forest land) of the date of issue of letter of allocation in case of underground mines. Further 24 months time would be allowed in case of unexplored blocks.

The allocation letter also stipulates that the allocation of coal block may be cancelled, interalia, on the ground of unsatisfactory progress in the development of coal mining project. In order to expedite the development of the coal blocks, various review meetings were held from time to time with the representatives of allotee companies. Based on the recommendations of various review meetings and also keeping in view the facts and circumstances, action is taken against the coal block allotees where progress is unsatisfactory.

As per the assessment made by the Central Electricity Authority (CEA), the coal requirement for the power plants designed on indigenous Coal has been estimated at 457 Million Tonnes during 2011-12. Against this requirement, the coal availability from the indigenous sources has been estimated at 405 Million Tonnes and the balance has to be met through imports by power utilities. Ministry of Power has fixed import target of 35 Million Tonnes, which is considered equivalent to about 52 Million Tonnes of indigenous coal due to higher calorific value of imported coal, for import by the power utilities during 2011-12. Pratik Prakashbapu Patil informed Rajya Sabha.

To ensure that targets are met, the coal supplies to the power utilities are monitored regularly by an Inter-Ministerial Sub group constituted in Ministry of Coal which also issues necessary directions for meeting any contingent situations relating to coal supplies to power utilities. Further, the Secretary (Co-ordination), Cabinet Secretariat periodically reviews the position of coal supplies to power utilities.

Demand and supply of coal
Central Government does not import coal. Under the present import policy of the Government, Coal is placed under Open General License (OGL) and can be freely imported by anyone in the country on payment of applicable import duty, according toPratik Prakashbapu Patil , Minister of state in the Ministry of Coal.

The minister said that the Coal Regulatory Authority is proposed to be set up to regulate and conserve resources in the coal sector; protect the interests of consumers and producers of coal and for matters connected therewith or incidental thereto. The proposed Regulator is expected to create a level playing field for all players in the coal sector and facilitate faster resolution of issues relating to economic pricing of coal, bench marking of standards of performance etc.

At present, suitable incorporation of these changes/suggestions is being examined in consultation with the Ministry of Law. Once finalized, the draft Bill would be submitted for the approval of the competent authority.

The coal demand of various sectors is finalized by the Ministry of Coal/Planning Commission on annual basis, after discussions with all the stakeholders. The production and supply position of the Government coal companies are periodically monitored at the coal company level and reviewed by the Ministry of Coal.

sourced CommodityOnline