Power minister Piyush Goyal on Monday said the country is set to lose Rs 25 lakh crore over the next 25 years as imported coal mandated for power plants could have been easily substituted with domestic coal if we had stayed away from the mindset of India being a land of perennial shortages. Around 83,100 MW of power plants based on imported coal were awarded in India on assumptions that the country will not be able to meet its coal requirement, the minister said at an event organised by Loksatta in Mumbai. This one decision will lead to a loss of Rs 1 lakh crore every year for the next 25 years to the exchequer, he said. “It was the mindset in India that we can never improve and will remain crippled forever,” Goyal said.
“The boilers and turbines of imported coal-based power plants were configured for high calorific content coal that cannot run on high fly-ash based Indian coal. Now, these plants will have to be run on imported coal for the next 25 years, even if we are capable of meeting our domestic demand. Besides, India will lose equivalent investments and employment opportunities. We cannot levy tax or get royalties, and the entire benefits will go to the foreign companies,” Goyal said.
In value terms it is 10 times bigger than the Rs 1.86-lakh-crore coal scam estimated by the Comptroller And Auditor General (CAG). The minister even expressed surprise over the intent of awarding these projects and hinted they have been done on purpose. A lot of imported coal-based power projects such as Tata Power and Adani Power’s Mundra-based plants are facing severe viability issues after the Indonesia government linked the coal prices to international indexes. There were many plants on the eastern coast of India to be fed by mines from Indonesia, that never saw the light of the day, otherwise the imports would have been much higher.
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“The situation in the last three years has significantly improved, but the legacy inherited from the past will have to be borne for the next 25 years,” the minister said. Coal India, India’s monopoly miner of coal, registered its highest-ever production growth in 2016-17 at 554.1 million tonne. The company, however, despatched 543.1 mt of coal. CIL’s inventory (or stock) rose by around 11 million tonne as production increased the despatches. CIL’s mines can pr duce up to 660 mt in the financial year.