Coal Blocks need fast tracking to save India from energy crisis

Coal Blocks need fast tracking to
save India from energy crisis
 JPPanda. Managing Director Priya mining
Consulatncy and Services Pvt Ltd
Non governance- a serious issue
 Amid all the confusion regarding the coal block
allotment, there is another very important aspect that
is often ignored – that of non-governance, which is
unfortunately a very serious issue in our country.
 The CAG has projected a loss of `1.89 lakh crore for
not opting for the auction route for the coal blocks.
Financial loss due non governance
 MoC does not take decision of CBA acquired land handed
over to new block holders.
 MoEF does not take decision on environment clearances and
forestry clearances.
 No afforestation is being done even though thousands of
crores have been deposited by block holders?
 That non clearance is causing huge loss to the nation is not
understood at all.
 The state governments
unspeakable reasons.
 In the name of protecting environment everything is being
done to withhold clearances, many a time on flimsy grounds
CAG should calculate loss to the
nation for withholding clearances
 If CAG could calculate a presumptive loss of Rs 1.89
lac crore for not opting the auction route for the Coal
Blocks, it should be possible to also calculate the
losses mentioned below.
 The cost of delay or not taking decision by various
ministries like MoC, MoEF, Various coal producing
States and pollution control Boards is enormous and
will runs more than the perceived loss of 1.89 lac
Odisha coal blocks
 As an example, let us examine the cases of coal blocks
allotted to different power, cement and steel plants etc.
in the state of Odisha Red tape is the bane of all
captive coal blocks in the state.
 The hundred and odd Sponge iron plants and a few
steel plants in Odisha have changed the industrail
landscape of western Odisha , one of the most
backward areas. Such coal based sponge iron plants
etc. have done wonders for employment generation etc.
in western Odisha.
 Had the allotted coal blocks been not stuck up due to
non governance of the Govts., both state and centre,
Odisha would have been in a position to produce 400
MTPA coal and nearly 80000 MW of power and the
states’ financial complexion could have completely
changed by industrialization.
Coal blocks of Odisha
 There are about 27 coal blocks allotted in the state of
Odisha. between 2003 to 2008, but only one mine
has started production. Most of the blocks are
awaiting EC (environment), FC (forest clearance),
EMP (environment management plan clearance),PL
(Prospecting lease), ML (mining lease approval)
 LA (land acquisition) has become a problem due to
lack of policy by both centre and state.
 The list of blocks are shown in the next slide
CE – Environment clearance, FC- Forestry clearances, EMP-Environment management plan, ML- Miining Lease and LA – Land
Status of coal blocks in OdishaName of the block allocated--company
Baitarani West Coal Block
Bijahan coal Block
Bankhui Coal Block
Chendipada & Chendipada-ii Coal Block
Dulanga Coal Block
Jamkhani Coal Block
Manhorpur & Dip of Manoharpur coal Block
Meeinakshi, dip side of Meenakshi B Coal Block
Mahanadi, Machhakata Coal Block
Mandakini Coal Block MIEL,IPL&TPCL
Mandakini B Coal Block
Naini Coal Block
New Patrapara Coal Block-BSPL, AML, DSPL, OSIL, ACL, VSL &
North of Akrapal Srirampur Coal BlocKSETSL
Nuagoan Telisahi coal Block OMC & AMDC
Radhikapur East Coal Block- TSIL, SIL & SPSSIL
Radhikapur west Coal Block
Ramchandi promotional Coal Block
Rampia and dip side rampia coal Block-SEL, GMR,AMIL, LGL,
Utkal B-1 coal BlockJSPL
Talabira-I coal BlockHINDALCO
Talabira-II & talabira-III coal BlockL
Utkal A coal Block- MCL, JSL, JSESL,
Utkal B-1 & B-2 coal BlockJSPL & MIEL
Utkal C coal blockUCL
Utkal -D Coal BlockOMC
EC,EMP,ML and LA are pending
EC,FC,ML and are pending
EC, FC, EMP,ML and LA are pending
EC, FC, EMP,ML and LA are pending
EC, FC, EMP,ML and LA are pending
FC stage II and ML are pending
EC, FC,ML and LA are pending
EC, FC, ,ML and LA are pending
EC, FC –stage II, EMP,ML and LA are pending
EC, FC, EMP,ML and LA are pending
PL is pending, FC and LA pending
EC, FC, EMP,ML and LA are pending
EC, FC, EMP,ML and LA are pending
PL is pending, FC and LA pending
PL, ML and LA are pending
FC, and LA are pending
Only running mine
FC, and LA are pending
FC, and LA are pending
FC stage II,and ML are pending
EC, FC, EMP andML are pending
FC stage II,and ML are pending
Loss to the nation
 These 27 blocks have an estimated reserves of 10000 Mil. T
and are to produce nearly 400 mil. T per annum. Normally by
this time they should have been producing atleast 400 Mtpa
but to be on the safe side, if things had been put in place and
clearances had been made available, these blocks would have
been producing positively more than 200 Mtpa of coal. The
allotment letter to the allottees provides that coal production
has to start on 36 months for OC mine and 48 months for
underground mine. All the blocks were allotted before the last
three years. Not one has started.
 Power generation would have been at least 40000MW
 If one was to work the loss caused to the nation by non
governance by the authorities then the loss would work out to
be phenomenal, much more that what CAG has assessed on
account coal block allocation
Losses to the nation
 Loss of valuable foreign exchange for 200 Mt import @
$150 (taking Rs55 per $)per tonne is nearly Rs165000
crores per annum if India imports the coal to feed to its
power stations
 Loss of revenue to state and governments by way of
royalty(@ of Rs 100 per tonne) is Rs2000 crores per
 Loss of sales tax (4%)and income tax(30%) to the Govt Rs
10000crores crores
 Presumptive loss Loss due to agitation etc. because load
shedding Rs 10000 crore
 Indirect losses due to poor growth of GDP, unemployment
etc Rs 100000 lac crores.
 The total is 2,70,000 crores/per year
 Can India afford such a huge loss
What is country’s priority
 The country needs coal for power and other industries
very badly and that too very quickly. Our more
concentration should be as to how the allocated coal
blocks start production urgently and the country should
move fast in the path of higher GDP growth.
 The exercise of loss on account of allocation of blocks
without auction is something which we should be kept
aside and not take a centre stage as it is taken now.
The whole of the nation particularly the parliament has
been so much taken up with this issue that all other
matters have taken a back seat.
Digging the past is retrograde step
 If we were to continue to looking the past as what has
been the loss on account of past decisions in the mineral
sector, the there will be no end as we can remain
permanently busy in working out the past losses
 Calculate all the losses to the country for not going through
auction route for all minerals for the last 65 years.
 Loss on account of Tata and other private parties given
chromite lease carving out pieces from the mining lease of
OMC, a state Govt undertaking.
 Loss on account of all the iron ore leases for the last 65
years in Odisha, Jharkhand and Karanataka given with out
going through auction route.
The country is paying a heavier price
 The country is paying a heavier price for lack of
governance/decision making. It will not be far when
regular blackouts shall be the daily feature. If we want
to remain perpetually poor we should waste our time
debating for years the losses due to coal block
allotment. Instead we should look forward and start
the coal mines urgently. Otherwise the danger of India
slipping on all fronts and slow growth would result in
unrest amongst population which will be impossible to
Has the private sector been
 It is true that, the private sector who has been allotted
Coal Blocks, neither had the expertise nor the necessary
technical manpower to start so many mines. Indeed the
record is extremely poor only 28 mines out of 214 have
started production. These are mostly very small mines
except a few JV companies of EMTA group with Bengal
and Punjab state electricity boards.
 But gradually the private sector will pick up once the
environment and forest clearances are granted.
 All the allocatees whether Govt or private have one
common grievance non clearance by different Govt
agencies like MoEF for EC (environment), FC (forest
clearance), EMP (environment management plan
clearance), State Govt for PL (Prospecting lease), ML
(mining lease approval) and LA (land acquisition).
Dismal progress of coal blocks
 Peeved at the dismal progress, the coal ministry has pulled
up existing coal block allocattees, both public and private,
for delay in the development of captive blocks. Only last
month, the ministry of coal has declared it has identified as
many as 93 coal blocks where almost all the requisite
milestones are pending. Of these, 45 belong to government
sector companies and the rest 48 to the private sector.
 It is surprising that Jaitapur nuclear power plant got all the
environmental clearances within 80 days but for coal
projects clearances are pending for years. Coal project
should be much more important as it is the back bone of
India’s energy security.
Stop talibanism in the name of
environment/forestry clearance
 A recent editorial in Times of India, Srivatsa Krishna
says that “ India adds one Australia every year by
way of population. Either we provide basic facilities
like food , shelter and electricity to our booming
population or protect a few elephant and tiger
 The recent black out of 60 crore population of India
will be regular affair and no political party can survive
when people move to the streets. The very existence
of India will be in danger.
 We are in the doorstep of an energy emergency
unless we act fast. In the words of Srivasta Krishna,
in the name of environment protectionism, the MoEF
should not indulge in environment ‘Talibanism’.
Lack of coordination between MoC and MoEF
 There failure to get clearances are both for Private sector
as well as Public sector and the ministry of coal is aware of
it but somehow there is no forward movement and it
appears that there lack of appreciation of the seriousness
of the crisis and therefore there is no coordination
between MoEF and MoC
 Why coal ministry should be there if they cannot
coordinate with other mininstries. Dismantle coal ministry
as suggested earlier by Mr Chidambaram and mange the
total issue through Coal India
Coal India the maharatna company being
allowed to stagnate
 Do we want to finish the Maharatna company Coal India by
refusing environmental and forestry clearances? Some of its
subsidiary companies are ISO 14000 for environment
management and yet it does not get clearances.
 True that Coal India has to be proactive for necessary
clearances but
 34 projects need environment clearance Coal India the
biggest Coal Company in the world is stagnating for last 2-3
years. They also face the same problem of forestry and
environmental clearances.
 As per one study, Coal India can more than double its
output to 1132 million Tonnes from its present production
of 464 million tonnes provided it secures the necessary
clearances for its 179 projects and start production from
these projects by 2016-17
Status of Coal India Projects
Out of 179, 130 proposal are awaiting stage I clearance and rest 49
forestry clearance.
stage II
Stage I clearance: It is like in principle clearance. Forest Dept. lays down
conditions, seeks deposits for land etc.
Satge II clearance : if conditions of stage I are fulfilled and compensatory
afforestation money is deposited, then stage II clearance is granted
This process takes anything above 4 to 5 years and sometimes up to 10 years.
Total area needing forestry clearance is 15656 hectares for stage I &
13115 hectares for stage II
Out of 179 projects waiting for clearances
45 are awaiting approval at MoEF Level
26 awaiting forestry clearance at MOEF Stage I level, will contribute 26 million
tonnes per annum (2016-17)
19 proposal awaiting stage II clearance will contribute 26 million tonnes
annum (2016-17)
57 environmental clearances of incremental capacity of 137 Mt/year are awaiting
clearance at various levels.
 8 proposals, capacity
 3 proposals, capacity 21.86 Mt awaiting clearance from
Expert Appraisal Committee(EAC)
 29 proposal, capacity 77.26 Mt awaiting final clearance
 Out of these 57 proposals 15 are also awaiting stage 1
forest clearance
 What would be the production from projects which are in
various stages of implementation?
 147 projects, capacity 437 Mt are in various stages of
 136 projects capacity 333.83 Mt planned to contribute in
 Out of the above 147 projects
 80 require forestry & environment clearance
 13 projects need forest clearance
 20 projects need both forest and environment clearance.
What can central Govt do to fast
track the process ?
 All forestry applications must be cleared in a strictly time
bound manner. Officers must be given specific time
bound jobs and in case of failure, accountability
established and punitive action taken.
 Project should not be held for Compensatory
afforestation issues it should go hand in hand fastest
possible way to compensate for the loss of forest cover.
 Alternately Govt should set up emergency machinery to
clear all projects in a time bound manner considering
that if delayed further, the country will face disaster by
way of unemployment, social unrest and chaos. The
country will become bankrupt by importing coal at
exorbitant rates. Indeed a war room strategy should be
 It is indeed unfortunate that the government is turning a blind
eye to all these advantages and instead getting caught in the
mire of red tape. The good work done by quick policy
decisions will far outdo the harm done by supposed to be
scam in coal block allocations
 The states will benefit the most out of these mines if they go
fast track. Stumbling blocks of the clearances must be
removed very quickly The States which appear to be in
dormant state must activate themselves and work to a well
thought of time bound action plan.
 There should be accountability of the officers to whom the
time bound task is given. For any callous delay on their part,
punitive action should be taken. If the top administration
becomes very serious and business like, all thing will fall in
place and coal production will jump up.
Are we prepared for the long
hours of laod shedding?
 If timely clearances are not given to the coal projects
and the other issues more of political in nature remain
on the front burner then country and its economic
growth will suffer. We will be back to dark age of
poverty. The unemployment due to poor GDP and the
long hours of load shedding due to no electricity will
result in social and political unrest of unimaginable

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