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Journalism of Courage
Merger of Rashtriya Ispat Nigam Ltd (RINL) with Steel Authority of India Ltd (Sail) and relaxation of equity norms for National Thermal Power Corp (NTPC) in coal mining are among the proposals that the Prime Minister will consider for improving infrastructure growth.
At a meeting last month, Prime Minister Manmohan Singh directed that the proposals be sent to his office for consideration in an effort to arrest the fall in growth rates of six infrastructure industries.
Infrastructure growth declined to 4.7 per cent in April-February, compared to 5.2 per cent in the same period a year-ago. In 2003-04, the growth rate was 6.2 per cent.
The reduction, according to a note from the Prime Minister’s Office, was primarily due to the decline in growth rate of finished steel. It noted that a major cause for inadequate growth in steel output in the public sector was the mismatch between availability of iron ore mines and steel production capacity.
RINL’s growth was hit due to inadequate availability of iron ore, while Sail held more iron ore mines than it required. A proposal for captive iron ore mines to RINL had been declined by Orissa, as its government plans to allot mining lease to firms that set up steel units in the state.
The steel ministry suggested that RINL be merged with Sail as it would make available the iron ore mines with Sail to RINL also. ‘‘Accordingly, it was decided that the steel ministry submit a detailed note to the PMO within the next week for further consideration and decision,’’ says the note.
The committee, headed by Prime Minister, also agreed that coal availability to NTPC could be improved by allowing the power utility to operate captive coal mines through joint ventures with 26 per cent equity. Singh asked the two ministries to submit their views which would then be discussed with officials for approval.
The policy changes in coal sector provide NTPC an opportunity to enter captive coal mining business but it has to put in 51 per cent equity in such joint ventures.
As per NTPC’s Corporate Plan 2017, it plans to achieve a commercial capacity of about 5 million tonnes per annum by 2009.
Besides the coal mines in North Karanpura and Talcher, NTPC has applied for allocation of captive blocks UTKAL-A and UTKAL-B of Talcher coalfields for captive mining. NTPC is the largest consumer of coal in the country and consumes about 82 million tonnes of coal annually.
As for increasing the number of new coal mines, the coal ministry has been told to prepare the list of projects whose detailed project reports are pending.
