Financial Daily from THE HINDU group of publications
Friday, Feb 22, 2002
Industry & Economy
`No new coal linkages to non-core sector'
KOLKATA, Feb. 21
NO fresh coal linkages will be given to non-core sector industries by the state-owned coal companies till the ongoing process of screening existing consumers is complete. This was stated here on Thursday by Mr N.K. Sharma, Chairman of Coal India Ltd.
Speaking at a seminar on `Challenges facing Indian coal', organised by the Coal Consumers' Association of India (CCAI), Mr Sharma said that the Union Ministry of Coal and Mines had advised all the State Governments to submit status reports of the existing linked coal consumers in the non-core sector in their respective States within November 2001, and later, the dateline was extended up to December.
But none of the State Governments had submitted the report till date. Against this background, it was decided not to give fresh coal linkages to non-core sector coal consumers till reports were received, Mr Sharma said.
He said that the purpose of such screening was to weed out fake consumers who had allegedly been lifting high grade non-coking coal against the linkage quota and had been selling the same coal to open market for a premium.
Citing instances of coal consumers who had linkages with coal mines of South Eastern Coalfields Ltd (SECL), he said that of the 65 non-core sector coal consumers, about 30 bulk coal consuming units had been found non-functioning but these units were still lifting coal against the linkage quota sanctioned by the concerned State Government.
He indicated that there were about 6,000 linked consumers from non-core sector consuming about 30 million tonnes (mt) of coal. It was thus to be ascertained whether the linked consumers were actually consuming coal for their own purpose or not.
Mr Sharma, however, felt that the State Governments would not make further delay in submitting their reports in the interest of greenfield projects, which might not be able to begin production due to non-availability of coal.
Commenting on the Union Environment and Forest Ministry's directive that power utilities situated more than 1,000 km away from coal pitheads should not use coal having more than 34 per cent ash from June 2002, Mr Sharma said that CIL did not have surplus fund to set up coal washeries for reducing ash content in coals produced by some of its subsidiaries.
The problem had to be tackled by the power utilities themselves by way of setting up their own captive washeries or by encouraging private entrepreneurs to set up washeries for them. He said, "I personally prefer private sector to set up integrated coal washeries with proper agreements with coal companies for fuel supply and power utilities for washed coal purchase. CIL, in such cases, will provide necessary infrastructure."
He was of the view that amendment to the Coal Mines Nationalisation Act was not enough to bring in private sector investment in greenfield coal-mining projects.
In his welcome address, Mr P. Roy, President of CCAI, said that further amendment of the Coal Mines Nationalisation Act was required for ensuring entry of private entrepreneurs in the coal sector. He expected that the Government would be successful in bringing about a consensus among all the political parties in near future so that the Act is ratified by Parliament at the earliest.
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