A coal watchdog, with bite

Written by fe Bureau | Agencies | New Delhi | Updated: Sep 8 2014, 12:49pm hrs
CoalOf these, the CEA said, 29 were in a ?super-critical? situation since they faced an acute shortage with less than 4 days of coal stock.
Even as he sought to allay fears about the coal shortage across power stations in the country and announced the setting up of a regulator for the sector, with statutory powers, union power and coal minister Piyush Goyal said on Sunday he intended to take a fresh look at the Financial Restructuring Plan (FRP) for state discoms after discussions with the states that had signed up for the project.

Addressing a press conference to mark 100 days of the NDA government, Goyal said the government would also look to appoint a chief for Coal India (CIL) breaking away from the tradition of the PESB making the selection, in order to usher in more professional efficiency. Moreover, a task force for greater surveillance of coalfields would be formed given the high levels of theft.

A non-statutory regulator, in my opinion, has no meaning because it had no teeth to implement any of its decisions; therefore, we are not pursuing a non-statutory coal regulator, the minister observed, adding that the fact that coal production had not increased was a reality he had inherited. Last Wednesday, the Central Electricity Authority (CEA) cautioned that the number of power plants with a critical shortage of coal or less than 8 days of fuel stock had risen to 56 from 52 a week ago. Of these, the CEA said, 29 were in a super-critical situation since they faced an acute shortage with less than 4 days of coal stock.

The minister also promised quick action after the Supreme Court took a decision on illegal captive coal mine allocationa hearing is slated for September 9so that output could be increased. Several steps, he said, were being taken to feed stranded gas-based capacity of approximately 24,148 MW with plans to use gas primarily to meet peak load demand.

Claiming thermal power generation had seen a huge jump compared to last year with 21% more units being generated in the June-August period, the minister said the higher production had resulted in coal being used up faster and causing a shortage despite CIL fulfilling its contracts. CEA data for June-July shows thermal power generation saw a jump of 18% and 19% respectively over the same period last year.

Goyal hinted at changes to the FRP for the state electricity boards saying that in its current format, there was neither any interest subsidy nor subvention. I am in dialogue with 3-4 states and others will come on board in a few days. We are working out an integrated plan and drawing a road map to provide quality power to these states first and then recover past losses, the minister said. The power ministry had approved the debt restructuring plan for state discoms in June 2012, but the scheme was implemented only in October 2013.

Accumulated losses of state power discoms, as on March 31, 2012, were estimated to be R2.46 lakh crore. The scheme is being implemented by discoms in Tamil Nadu, Rajasthan, UP, Haryana, Himachal Pradesh, Andhra Pradesh, Bihar and Jharkhand.

The minister also laid out an ambitious plan of producing one billion tonnes of coal by 2019, which would mean more than doubling the current production in the next five years. The production target is based on a two-pronged strategy starting with Coal India buying 250 additional rakes to evacuate larger quantities of coal along with three critical railway lines in coal-rich states of Chhattisgarh, Jharkhand and Odisha.

Coal India's production target for 2014-15 has been set at 507 million tonnes (MT); the miner which accounts for 80% of domestic coal production, missed its target of 482 MT for 2013-14, producing 462 MT. In the first five months of 2014-15, the miner produced 175.88 MT against a target of 183.44 MT.

Goyals game plan

* Coal regulator to be appointed with statutory powers

* Appointment of Coal India chief by government, breaking away from past traditions of nomination by PESB

* The minister also laid out an ambitious plan of producing one billion tonnes of coal by 2019, which would mean more than doubling the current production in the next 5 years

* A task force for greater surveillance of coalfields would be formed given the high levels of theft

* Goyal will also take a fresh look at the Financial Restructuring Plan (FRP) for state discoms after discussions with the states that had signed up for the project

* Several steps, Goyal said, were being taken to feed stranded gas-based capacity of approximately 24,148 MW with plans to use gas primarily to meet peak load demand