PIYUSH GOYAL
‘There is no
intention to denationalise Coal India’
Energy, described his first 100 days in
the post as a “baptism of fire”. According to him, he inherited a crisis-ridden
sector where power outages are the norm and
coal block allocation has been arbitrary.
Load shedding and power cuts are still
common in many States; the common man has to pay a high tariff because of power theft and financial as well as technical
losses; coal and gas supplies are not enough to fire the plants; lack of
adequate infrastructure makes power transmission
from surplus States difficult; and the potential for renewable energy is yet to
be fully exploited.
The Bharatiya Janata Party-led National
Democratic Alliance government has been talking about affordable 24×7 power to all households and industrial and
commercial establishments, and adequate power to the agriculture sector.
Critical to achieving this is continued fuel supply,
which is a challenge following the September 24 verdict of the Supreme Court to cancel the allocation of 204 coal blocks
of the 218 that were made between 1993 and 2010 while giving breathing time
until March 31, 2015, for the mines that were
in operation. This left Goyal and his team with just six months to work out a fool proof reallocation mechanism, so
that the country did not face a severe crisis.
In this conversation with Frontline,
Goyal said that the negotiations with the five trade unions to convince them to
withdraw their strike were a learning experience.
The Centre’s intervention to end the coal workers’ strike averted a power
crisis. The second and final day of the strike
(January 7) called by workers of Coal India Limited showed peak supply shortage
at 5,204 MW—almost the entire requirement of
Delhi. The strike caused a coal production loss of an estimated Rs.300 crore,
with over 75 per cent of the 1.5 million
tonnes a day output taking a hit. Excerpts:
How do you justify
the government’s decision to adopt the ordinance route for coal block auctions,
when it could have been done
through rules and notifications?
We could not have done this via rules
and notifications for the simple reason that there was existing infrastructure associated with the illegal
allotments.These had to be acquired to be given in the auction or fresh
allotment. Otherwise, we would have been in an anomalous
situation where the block whose mining rights had been cancelled by the Supreme
Court had reverted to the government and was
now being offered through a transparent process. But the winner of the block under fresh auctions would not have been
able to work on that mine because the land and mining infrastructure remained with the prior allottee. We would have
got no bids in such a situation. The ordinance was an absolute must to
acquire the land and associated infrastructure and give it along with the mining rights. Second, the ordinance was required
because the Rajya Sabha neither passed nor rejected the Bill [the Coal Mines
(Special Provisions) Bill]. We cannot create a situation where coal
is in short supply and power tariff shoots through the roof.
With the ordinance, a
concern among the trade unions was that the government was moving towards denationalisation of
Coal India. How were you able to convince them?
During my talks with the unions, I found
them to be sincere about the workers’ well-being and about the company. At various levels we [Coal India
management, Ministry officials] have tried to address their concerns. But,
probably when they finally met with me and I explained to
them in the simplest manner, I think they went back completely satisfied. There is no denationalisation of Coal
India. There are always certain sections who try to misguide the workers…. But
after meeting with me they were completely
satisfied. In fact, the meeting was a great
learning experience. Some of the union leaders gave excellent suggestions on
how to increase production in Coal India. And
now I have it from the union that they will participate in this
one-billion-tonne coal production target by 2019-2020.
What about the
unions’ concerns on allowing commercial mining?
They are fully satisfied that our
intention is neither to denationalise Coal India nor to create at any point of
time a situation where workmen’s interests are affected. But, at the same time, we must remember
that there are users like small households (poor) which still buy 3-4 kilograms
of
coal at Rs.20-30 a kg. Should they not
get it at Rs.2? Look at the lakhs of red brick kilns
which end up going to the black market to buy coal at a high cost. I am told
they are under threat of closure because of the
high costs. There are refractory manufacturers who do not get coal, small
boiler units,
small- micro units, who don’t get it. Now, Coal India is a monopoly which is a
monolith. It cannot satisfy small needs—[for example,] if somebody needs 1,000- 2,000 tonnes monthly. We need someone to
take care of all these small requirements. If some mines are opened up, after
all the end-use is met—existing power
plants, steel and cement, and all captive power plants. I think it is a great
service. The revenue from such activities will
also help the development of the eastern States and mineral-bearing States.
The ordinance
protects officials from future litigation. What was the trigger?
There was no trigger. We have made the
situation so transparent that there is no discretion left with any of us. There
is zero discretion in the system, it is all
completely process-driven. But, historically, this sector is one where even
officers don’t wish to work in the department because of the
legacy.
There have been instances where officers
with impeccable integrity have been questioned when in and even after leaving the Coal Ministry. Several times they
have been questioned on procedures. Therefore, it is incumbent on the political leadership to recognise that officers
who are working under a lot of stress should not face embarrassing situations
unless mala fide intention is proven. I don’t
want cynicism and scepticism to come into the Ministry.
Your Ministry happens
to be more exposed to criticism of the Comptroller and Auditor General, the
government auditor.
Now everything is transparent and in the
public domain, and everything is done through electronic auction, so where is
the scope for CAG issues?
At the monitoring
level, are you satisfied with the system in place?
We are continuously deliberating on how
to improve the whole process. What better, what next, what could happen?
Your critics say that
in the ordinance the fine print is in the rules. It is seen that by capping the
bid price, the government is
artificially controlling the power tariff at the consumer end. Do you agree?
Surprised! There can be no such control
from my side. What we have done is that instead of allowing prices to shoot through the roof and increase power
tariffs across the country, we have this unique methodology where the Coal
India price (where there is a scope of profit, CIL
is making profit) is what we have capped the bid price at. We have asked people
to bid downwards, to see at what lower costs
they can produce. I am allowing the efficient producer to come forward. The
entire benefit is being passed on to consumers.
So, how does Coal
India work on its price? Is it market-linked?
That is a legacy issue. Maybe I should
have a committee to study the entire pricing structure of Coal India. We
haven’t yet changed the price. I am happy to agree
to your suggestion that Coal India should look at its pricing structure and
maybe rationalise it a little.
Prices of imported
coal have softened. If this situation continues, do you feel that it can be to
India’s advantage?
At no point of time do I feel that
imported coal will work except at two or three plants that are in the coastal
areas. While we had this major power requirement and shortage
of coal, I did a study and found that there were very few plants dependent on imported coal or were situated on the
coast.
A boost to the power
sector is linked to fuel—coal. What are you doing for coal linkages?
Coal linkages that are already given are
not being used fully. My effort is to get Coal India to ramp up production and
start providing the full linkages.
You have said we have
enough power generation capacity and that it is the transmission infrastructure
that is an issue. What is your
view now?
We have a lot of capacity that is either
stalled, stressed or underutilised. We have capacities that are old. Both of
these we need to get back into operation—some by
ensuring adequate supply of coal and others by replacing old equipment with new ones. The effort is to raise the plant
load factor to 90 per cent. Why should they be operating at 65 per cent? We can
easily increase generation by 50 per cent from
the existing capacities by this. Besides, by restarting the stalled or
stressed plants and having a renewed thrust on renewable energy, we can easily
double the current electricity generation while
keeping costs low and strengthening the ability of the States to take supplies.
When do we expect
complete grid connectivity to happen?
By 2019, this country will be power
surplus and every home and industry will be connected with the grid. My focus
is fuels, transmission and distribution, and
renewables. Simultaneously, we are working on the next stage of generation
capacity.
How much is the
Finance Ministry with you as far as the financial package is concerned?
The greatest support for my Ministry has
been from the Finance Ministry, besides the Ministries of Mines, Steel and Environment. I can only say that all of
us are working together to achieve the 24×7 power supply to all targets.
Are all States on
board in the matter of financial restructuring packages for the distribution
companies?
We have to work with each State, find
solutions for each individual State. The States will have to take their own
initiatives to sort out their own internal problems.
Prime Minister
Narendra Modi recently said that just as one could decide which mobile service
provider one wanted to use, the same will
be the case in power supplies. Does it mean that private participation will be
allowed in discoms as well?
The discoms will be one supplier, but
there will be different distributors who will be in the market. So, there can
be a situation where there will be a state
discom and NTPC and other private players competing for power distribution.
Will there be
cross-subsidisation of renewable energy?
You may find some bundling with power
produced from coal. You may find occasions where renewables will be a compulsory generation obligation. The
country recognises that we need greater clean energy.
(Published in Frontline.in)
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