We are not talking of coal asset privatisation: Goyal

‘Privatisation’ does not mean hiving off government-owned mineral assets or companies to the private sector, said Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy. In other words, there is no plan to offload existing coal assets to private entities.

“We have not talked of privatisation of coal…we are talking about involving the private sector in helping explore and mine more coal at a faster pace. We need this to meet the ever-increasing demand for fuel in the country and ultimately meet the demand for power,” he told BusinessLine .

“What we want is to improve the efficiency of Coal India Ltd … and enhance output to encourage participation of more people through a transparent process,” he added.

Power push Goyal said the Government was focussed on trying to expand power generation and availability of coal to various sectors dependent on the fuel. “It is not as if we are completely revamping the sector and handing it over to the private sector,” he added.

President Pranab Mukherjee, in his address to the joint session of Parliament on June 9, had said: “Reforms in the coal sector will be pursued with urgency to attract private investment in a transparent manner.”

This revived the debate on privatisation in the coal sector, leading to various interpretations, including that assets would be hived off and given to the private sector.

The issue came to the forefront as Coal India was not able to cater to the demands of the power sector. Central Electricity Authority data, as on June 23, show that 49 out of 100 coal-based power plants have just a week’s feedstock.

This problem is not with the unavailability of coal in the country, but with its mining. India’s coal reserves are estimated to be nearly 250 billion tonnes — the fourth largest in the world. Technical and capacity problems, coupled with delays in environmental clearances, are cited as the main reasons for such critical stock levels.

According to the Coal Ministry, demand was at 769 million tonnes (mt) last year against domestic production of 564.76 mt, which necessitated imports.

Auction plans Asked about coal block auctions, Goyal said: “We have not done any auctions of coal blocks as yet. A lot of the coal blocks that can be auctioned are stuck in litigation. We are waiting for the Supreme Court judgment. In the meantime, we are keeping ourselves prepared to kick-start the process of auctions.”

Talking about the new elements in the auction mechanism, he said: “We have asked the Government to allow us to explore the possibility of getting all the approvals before we offer the block. This would include mining, environmental clearances and land, among others, so that it becomes a plug-and-play project, where the bidders can quickly monetise it,” he added.

This, Goyal said, will make the projects more bankable and offer safety and security to the investor.

“Ministries can work in tandem with each other and get those approvals fast and enhance the value of these projects,” he said, adding that the Ministry is yet to apply its mind on the mechanism to be adopted.

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