PM calls meeting to discuss coal shortage

Prime Minister Manmohan Singh has called a high-level meeting with the ministers in charge of coal, power, environment and finance to find a solution for the ongoing issues regarding coal shortage.

“The main agenda for the meeting is to discuss problems currently facing the coal, power and the environment sectors. The growth in the last five years and the plans for the current financial year would be discussed in the meeting,” Coal Minister Sriprakash Jaiswal said.

The meeting, to be held on May 16, would also be attended by Planning Commission Deputy Chairman Montek Singh Ahluwalia. Jaiswal also added that the PM had expressed grave concern over the issues plaguing these sectors. “He has said that the country’s growth should not be hampered. Coal production impacts the performance in other ministries like power and steel etc,” he said.

Coal is a critical input for industries operating in major infrastructure sectors of power, steel and cement. Issues regarding environment clearances and land allocation coupled with the capacity constraints of the state-owned Coal India Ltd (CIL) ensured no growth in the miner’s production at 431 million tonnes (mt) last financial year.

The government had originally estimated a shortage in coal availability to the tune of 83 mt for the current financial year against a demand of 713 mt from consumers. Latest estimates suggest that this shortage is likely to cross 112 mt by March 2012 which will be met through imports.

The coal ministry admits that the environment ministry’s controversial ‘No-Go’ policy notified last year is a major reason for the rapidly building shortages in coal availability. A 10-member Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee is currently taking a fresh look at the policy which bars coal mining in heavily forested areas.

“The GoM is taking a look at the problems that have arisen because of environment issues. The PM’s meeting will have a larger agenda. He has expressed extra concern,” Jaiswal said.

He also informed that offers for coal imports sought by CIL from international suppliers would be received by May 23. The company had earlier invited expressions of interest and received 27 proposals from 15 companies. CIL will enter into long-term offtake agreements with the shortlisted suppliers after deciding the quantity to be imported.