By Ravi Uppal
As per the Government policy of 1993, the most difficult, unattractive and unviable coal blocks which lacked even basic infrastructure and in which Coal India Limited had no interest were allotted to various companies for captive use in end use projects.
We must appreciate that India is the only country in the world that allotted coal blocks not for commercial mining but for value addition only by investing heavily in end use projects.
Six different democratically elected Governments in their wisdom have followed this policy from 1993 to 2009 and no political party in the opposition even had ever objected to it.
Similarly, no red flag has ever been raised by any industry participant who may have felt deprived of a rightful allocation. The development of these difficult coal blocks is a challenging task and that is why less than 20% of the coal blocks have become operational in 17 years.
World-over there is plenty of coal and all countries welcome investment by companies to develop blocks just to sell coal without any insistence on investing in any end use project. This is because higher coal production leads to enhanced employment opportunities, higher tax revenues and royalty on extraction.
Do we remember the days when one had to wait for months to get a phone or a cooking gas connection or even to buy an ambassador car?
Unfortunately we are in a similar situation for coal. India’s coal import bill is rising—ironically we are the world’s third largest importer of coal despite having its fourth largest reserves.
So need of the hour is to make all out efforts to expedite development of coal blocks and increase production which will help enhance power generation.
Any de-allocation would be very demoralising for the entrepreneurs. Why should bonafide allottees be penalised? For creating wealth for the nation by developing these difficult coal blocks, for investing Rs 4 lakh crores in steel, power, cement projects, providing employment to millions of people and, in the words of India’s first Prime Minister Jawaharlal Nehru’s, creating “Temples of Modern India”?
In the 90s when coal was neither expensive nor difficult to get through Coal India there weren’t many people willing to take coal blocks and develop them. It is only in the last decade that coal has become so sought after in India to meet the energy needs of our rapidly growing economy. One cannot evaluate the decisions made 20 years back in today’s context.
Any largescale de-allocation will severely dent investor perception and derail our economic recovery. All stakeholders such as investors, lenders, employees, customers and suppliers will be adversely affected for no fault of theirs. India’s credibility will be severely eroded.
We need to ponder over:
1.) Would we have been better off if no coal blocks had been awarded?
2.) Do most people even realize the effort needed and the challenges faced in making these coal blocks and the end use projects functional?
3.) Is it fair to cancel these blocks decades after their allocation when huge investments have been made to set up large steel, cement, power plants around them, and many coal blocks are ready to start producing the much needed coal but are held up due to uncertainties?
This issue is of national importance and deserves careful consideration. We hope that India emerges stronger from this uncertainty and continues its growth story.
(The author is MD & CEO, Jindal Steel & Power Ltd)
As per the Government policy of 1993, the most difficult, unattractive and unviable coal blocks which lacked even basic infrastructure and in which Coal India Limited had no interest were allotted to various companies for captive use in end use projects.
We must appreciate that India is the only country in the world that allotted coal blocks not for commercial mining but for value addition only by investing heavily in end use projects.
Six different democratically elected Governments in their wisdom have followed this policy from 1993 to 2009 and no political party in the opposition even had ever objected to it.
Similarly, no red flag has ever been raised by any industry participant who may have felt deprived of a rightful allocation. The development of these difficult coal blocks is a challenging task and that is why less than 20% of the coal blocks have become operational in 17 years.
World-over there is plenty of coal and all countries welcome investment by companies to develop blocks just to sell coal without any insistence on investing in any end use project. This is because higher coal production leads to enhanced employment opportunities, higher tax revenues and royalty on extraction.
Do we remember the days when one had to wait for months to get a phone or a cooking gas connection or even to buy an ambassador car?
Unfortunately we are in a similar situation for coal. India’s coal import bill is rising—ironically we are the world’s third largest importer of coal despite having its fourth largest reserves.
So need of the hour is to make all out efforts to expedite development of coal blocks and increase production which will help enhance power generation.
Any de-allocation would be very demoralising for the entrepreneurs. Why should bonafide allottees be penalised? For creating wealth for the nation by developing these difficult coal blocks, for investing Rs 4 lakh crores in steel, power, cement projects, providing employment to millions of people and, in the words of India’s first Prime Minister Jawaharlal Nehru’s, creating “Temples of Modern India”?
In the 90s when coal was neither expensive nor difficult to get through Coal India there weren’t many people willing to take coal blocks and develop them. It is only in the last decade that coal has become so sought after in India to meet the energy needs of our rapidly growing economy. One cannot evaluate the decisions made 20 years back in today’s context.
Any largescale de-allocation will severely dent investor perception and derail our economic recovery. All stakeholders such as investors, lenders, employees, customers and suppliers will be adversely affected for no fault of theirs. India’s credibility will be severely eroded.
We need to ponder over:
1.) Would we have been better off if no coal blocks had been awarded?
2.) Do most people even realize the effort needed and the challenges faced in making these coal blocks and the end use projects functional?
3.) Is it fair to cancel these blocks decades after their allocation when huge investments have been made to set up large steel, cement, power plants around them, and many coal blocks are ready to start producing the much needed coal but are held up due to uncertainties?
This issue is of national importance and deserves careful consideration. We hope that India emerges stronger from this uncertainty and continues its growth story.
(The author is MD & CEO, Jindal Steel & Power Ltd)
