Jairam's sudden clearance rush on coal

Union environment minister Jairam Ramesh, often criticised for his controversial ‘no-go’ policy on mining in foreted areas, has been on a clearance spree of late. The heightened activity on permissions to power and mining projects, which had been stuck for long, coincides with the run-up to a likely reshuffle of the council of ministers this month.

In the past week, the minister has cleared at least nine coal blocks earlier caught in the go/no-go maze since 2009. The blocks were allotted to NTPC, the Oriss Ultra Mega Power Project (UMPP), Orissa Power Generation Corporation (OPGC) and Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RRVUNL), among others.

On June 23, Ramesh had given approval to opening the Tara, Parsa East and Kante Basan blocks in the Hasdeo-Arand forest region of Chhattisgarh. The blocks were opened despite the Forest Advisory Committee (FAC) recommending against it.

The ministry of coal had awarded the Parsa East and Kente Basan coal blocks to RRVUNL to feed two thermal power projects in Rajasthan. The Adani Group and RRVUNL had formed a joint venture firm, Parsa Kente Collieries Ltd, to develop these mines. Tara was allotted to Chhattisgarh Mineral Development Corporation.

On June 29, the environment ministry gave clearance to another six coal blocks in Orissa, of which five were in the no-go area. Of these, three (Meenakshi-A, Meenakshi-B and Meenakshi Dipside) have been allocated to the 4,000 Mw UMPP. Two blocks (Manoharpur and Manoharpur Dipside) were allocated to the 1,320 Mw power plant of OPGC and one (Dulanga) to NTPC's 1,600 Mw unit. These six cleared blocks could free generation of 6,000 Mw.

The state governments involved — mainly Rajasthan, Orissa and Chhattisgarh — have been persistently following the issue with the ministry and also the Prime Minister for several months, citing development concerns.

Incidentally, while clearing the coal blocks in Chhattisgarh, minister Ramesh said his decision came from the “imperative to sustain the momentum generated in the 11th Plan in terms of capacity addition…I have necessarily to keep the broader development picture in mind and balance out different objectives and considerations.”

During the 11th Plan (2007-2012), 52,000 Mw is expected to be added, as compared to 21,000 Mw in the previous Plan period. Of this, 42,000 Mw is expected to be coal-based capacity, as compared to 15,000 Mw in the 10th Plan period.

The environment ministry started to classify the country’s forests as ‘Go’ and ‘No-Go’ areas from 2009. The categorisation specifies regions where coal mining could be permitted only after stringent forest clearances were obtained. The decision came under severe criticism from the power ministry, with several projects stuck due to the classification. The outcome was formation of a group of ministers (GoM) this February to sort out the tussles on the issue. The 12-member GoM has met thrice -- in February, April and June -- but is yet to reach any consensus.

Coal is a critical input for fuelling growth of major infrastructure sectors such as power, steel and cement. Any irreversible slump in coal production, thus, directly affects the country’s gross domestic product (GDP) growth. In all, 203 blocks were in the no-go areas. The output from these can generate around 130,000 Mw of power per annum, says the coal ministry. The ‘no go’ criterion covers nine coalfields, including Singrauli, North Karanpura, Ib Valley, Mand-Raigarh, Talcher, Sohagpur, Wardha Valley, Hasdeo-Arand and West Bokaro.