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Coal Blocks need fast tracking to save India from energy crisis

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Coal Blocks need fast tracking to save India from energy crisis Powered By Docstoc
					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       withholding   PL   and   ML   for
  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
     crores.
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
  acquisition
Status of coal blocks in OdishaName of the block allocated---                                                 Status
company
1.   Baitarani West Coal Block         OHPC                                  EC,EMP,ML and LA are pending
2.     Bijahan coal Block                  BPSL                              EC,FC,ML and are pending
3.     Bankhui Coal Block                 SIPCL                              EC, FC, EMP,ML and LA are pending
4.     Chendipada & Chendipada-ii Coal Block                                 EC, FC, EMP,ML and LA are pending
MAHAGENCO
5.     Dulanga Coal Block                NTPCL                               EC, FC, EMP,ML and LA are pending
6.     Jamkhani Coal Block                BSPL                                FC stage II and ML are pending
7.     Manhorpur & Dip of Manoharpur coal Block                              EC, FC,ML and LA are pending
OPGC
8.     Meeinakshi, dip side of Meenakshi B Coal Block                        EC, FC, ,ML and LA are pending
PFCL
9.     Mahanadi, Machhakata Coal Block                                       EC, FC –stage II, EMP,ML and LA are pending
                                  GSEL & MSEB
10.    Mandakini Coal Block MIEL,IPL&TPCL                                    EC, FC, EMP,ML and LA are pending
11.    Mandakini B Coal Block          MBCCL                                 PL is pending, FC and LA pending
12.    Naini Coal Block      GMDC &PIPDICL                                   EC, FC, EMP,ML and LA are pending
13.    New Patrapara Coal Block-BSPL, AML, DSPL, OSIL, ACL, VSL &            EC, FC, EMP,ML and LA are pending
PGL
14.    North of Akrapal Srirampur Coal BlocK-                                PL is pending, FC and LA pending
SETSL
15.    Nuagoan Telisahi coal Block OMC & AMDC                                EC,   FC,   EMP,ML   and   LA   are   pending
16.    Radhikapur East Coal Block- TSIL, SIL & SPSSIL                        EC,   FC,   EMP,ML   and   LA   are   pending
17.    Radhikapur west Coal Block        RML, OCL, OIL                       EC,   FC,   EMP,ML   and   LA   are   pending
18.    Ramchandi promotional Coal Block                                      EC,   FC,   EMP,ML   and   LA   are   pending
                                            JSPL
19.    Rampia and dip side rampia coal Block-SEL, GMR,AMIL, LGL,             PL, ML and LA are pending
NPL& REL
20.    Utkal B-1 coal Block-               JSPL                               FC, and LA are pending
21.    Talabira-I coal Block-       HINDALCO                                 Only running mine
22.    Talabira-II & talabira-III coal Block-    L                           FC, and LA are pending
MCL,HIL & NLC
23.    Utkal A coal Block- MCL, JSL, JSESL,               SDRIL              FC, and LA are pending
24     Utkal B-1 & B-2 coal Block-            JSPL & MIEL                    FC stage II,and ML are pending
25.    Utkal C coal block-                UCL                                EC, FC, EMP andML are pending
26.    Utkal -D Coal Block-             OMC                                  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
  annum
 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
     control.
Has the private sector been
faultless?
  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
     corridors”.
    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         stage II
    forestry clearance.
   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       per
    annum (2016-17)
   57 environmental clearances of incremental capacity of 137 Mt/year are awaiting
    clearance at various levels.
Contd…..
 8 proposals, capacity      14.44    Mt   awaiting   terms   of
  reference(TOR)
 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
  implementation
 136 projects capacity 333.83 Mt planned to contribute in
  2016-17
 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
  developed.
                    Conclusion

 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
   dimensions
THANK YOU

				
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