Our partys analysis on UP proved wrong. We never expected such a low number of seats

Sriprakash Jaiswal: Since 1993,the demand for coal from the power sector has increased at a rapid pace. The government thought that Coal India CIL may not be in a position to meet all the fuel requirements and there was a need to find an alternative route. In subsequent years,as the requirement of coal grew with increased demand for power,we thought that if coal blocks were not given to the end-use plants,fuel shortages in the country would continue.

During the 1993-1998 period,eight coal blocks were allotted for the captive use of end-use plants in cement,steel and power sectors. Then the NDA came to power and allotted 35 coal blocks to plants with end-use requirements like power and steel. In 2004,UPA-I adopted the same process for giving coal mines to meet the requirement of power plants. During UPA-I,we tried to bring in some reforms in the allotment policy. It was decided that no coal block would be given without advertisements and without seeking applications openly. Another policy decision was taken that there had to be a bank guarantee for each coal block. Captive coal blocks were allotted till 2009 with the idea of giving increasing fuel availability for the power plants.

The government has allocated 218 captive coal blocks so far. Of these,28 coal blocks have started operations and coal extraction has begun. For many other coal blocks,coal extraction has not started because of various issues concerning forest and environmental clearance,land acquisition,etc. Till December 2011,23 blocks have been de-allocated by the coal ministry. After evaluation,we issued show-cause notices to another 58 coal blocks.

In 2006-07,we realised that due to the huge demand for coal,we needed to go in for a bidding process. Initially,trade unions opposed the bidding process and then the states started to oppose it. The states were apprehensive about the fact that bidding would not provide any significant gains for them. Some of the states that were opposed to it included West Bengal,Odisha,Jharkhand,Chhattisgarh and Madhya Pradesh.

In 2009,after meeting mining ministers from all the states,it was decided that the money generated from the bidding process would go to the state governments. And we decided that instead of amending the Coal Mines Nationalisation Act,we should make changes in MMDR Mines and Mineral Regulation and Development Act so that it could cover other minerals as well. The MMDR Amendment Bill was introduced in Parliament later and it was referred to the Standing Committee. The Bill finally got parliamentary approval in 2010 and we have also identified coal blocks that would initially be put under the auction route. We now expect to commence the bidding process within the next few months. Let me be clear: all coal blocks were given with consent of state governments. Only after their approval was the process of allotment through. Even at the time of allotment,officers at the level of chief secretary signed it. States know all this. I dont think any state government will object to it.

DK Singh: What is your take on the recent CAG report that has put losses on account of free allocation of captive coal blocks at a staggering Rs 10.7 lakh crore?

Sriprakash Jaiswal: Officially,we do not have any report from CAG. But we are deliberating on the issues raised in the draft report. There are so many hydro power projects in the country. Is there no cost of water? There are so many steel plants. Is there any bidding process for iron ore blocks? The same goes for maurang and sand. Is there any bidding process for them? If there is bidding process in all this,how much will construction cost go up and what will be the cost of steel? It is,therefore,not proper to call it coal block allotment a scam. It is totally wrong to compare it with 2G spectrum allocation.

Sunil Jain: You have been talking only about captive mining. But look at the oil sector where we broke the monopoly of ONGC after bringing in private players. Why has it not been done in the case of coal?

Sriprakash Jaiswal: In 2000,a Bill was introduced in the Rajya Sabha to allow commercial coal mining by the private sector. But there was no consensus. As long as a consensus is not arrived at,we cannot proceed. If the Bill is passed and consensus is arrived at,I am in favour of allowing commercial mining of coal.

Sunil Jain: Take the example of Jindal Power whose capital cost of mining is about Re 1 per unit and cost of coal is about 50-60 paise per unit,but they are selling power at Rs 4 per unit. This implies that the benefit of captive mining has not gone to consumers.

Sriprakash Jaiswal: The price at which power is sold to consumers is not decided by the coal ministry. It is for the electricity regulatory authority to decide on the power tariff. We do not have any knowledge about Jindal Power and the rate at which they sell electricity. We will ask the power minister to clarify the issue.

Sunil Jain: Which are the political parties that are not in favour of commercial coal mining?

Sriprakash Jaiswal: I do not want to comment on it as there is no political consensus on the issue. However,the Prime Minister is in favour of the Bill which was introduced in the Rajya Sabha. There is an EGoM looking into it. Because of lack of consensus,even the EGoM is not meeting regularly. As have seen,the government faces difficulties in passing even Bills of routine nature.

Amitabh Sinha: What is your take on the environment ministrys proposal of no-go or go areas for mining?

Sriprakash Jaiswal: The debate about no-go and go areas has not helped us. Coal companies cannot enter no-go areas even if there is very little forest cover there. When the coal companies are willing to plant forest four times of what would be destroyed because of mining,why have the companies not been allowed to do mining in no-go areas?

Amitabh Sinha: But natural forest cover cannot be regenerated and the quality of regenerated forest is not comparable with a natural forest.

Sriprakash Jaiswal: The work relating to regeneration and maintenance of forest is the work of the monitoring authority. Let them do their work. I understand it takes 20-25 years to create forest cover. But after such a long period if there is four times a bigger forest,what is wrong in it?

DK Singh: You had an interesting exchange of letters between then environment minister Jairam Ramesh on the go and no-go areas? What were the issues between both of you?

Sriprakash Jaiswal: In principle,I support Jairam Rameshs stand on protecting the environment and forests of the country. But before taking any call on mining,the health of the countrys economy has to be taken into consideration. We need coal for industrialisation and economic progress,for removing poverty.

Subhash Narayan: CIL has been asked to sign fuel supply agreement FSA for all power projects to be commissioned up to March 2015. Do you think the company will be able to meet the commitments made under FSAs?

Sriprakash Jaiswal: We have examined the issue and we are confident that over the next few years,coal production will increase and CIL will be able to commit coal supply for each power project.

Sunil Jain: UKs The Childrens Investment Fund TCI,a minority shareholder in CIL,has stated that government is mishandling CIL and is harming the minority shareholders interest. Do you think such FSAs would affect foreign investments in the country?

Sriprakash Jaiswal: Every shareholder in CIL must realise that India follows a socialistic pattern of governance. We take decisions on the basis of the larger welfare of people. Any foreign investor,before coming to India,must realise that CIL is a government-owned company. Thus,they all need to follow norms set by the government. Everything cannot be solely a commercial decision.

Vincent Varghese Online reader: Is increasing the price of coal the only way to increase the profitability of Coal India?

Sriprakash Jaiswal: Prices of coal have not been increased. CILs main aim is to increase coal production and ensure coal supplies at reasonable rates to the power stations,cement companies and other establishments,so that infrastructure can be strengthened and greater economic growth is achieved.

Vincent Varghese: Why is CIL not using its cash reserve to ensure the countrys energy security?

Sriprakash Jaiswal: I know that CIL has a huge cash reserve and we have asked CIL to look at buying coal mines abroad. Shortly we will buy two coal blocks abroad. The company is looking to buy mines in Indonesia,Australia and South Africa.

Aishwarya Narang Abhinav Public School,Pitampura: What action have you taken against the theft of coal and the coal mafia?

Sriprakash Jaiswal: This is an issue to be dealt with by the state governments as it concerns law and order. This is a state subject. We do not have the infrastructure to deal with the coal mafia. Recently one ex-chief minister said coal theft is a cottage industry. As long as such a perception exists,it would be difficult to deal with the theft. State governments will have to tighten the machinery to stop coal thefts.

Coomi Kapoor: During the UP elections,you had said that there would be Presidents rule in the state but that backfired and it was even taken up by the Election Commission.

Sriprakash Jaiswal: My statement was taken out of context. When I was asked about the results after the last phase of the UP elections,I said that in case no party gets a majority,there is a constitutional provision for Presidents rule. This was taken by the electronic media without the context in which it was said. The next day,I sent the entire statement to the Election Commission and requested Mr Quraishi to issue an advisory and make their independent assessment within 24 hours. Within 24 hours,I was given a clean chit. I admit that our partys analysis on Uttar Pradesh election proved wrong. We never expected such a low number of seats. We were thinking about getting at least 60-70 seats. We feel that popular measures announced by the Samajwadi Party,like free laptops and an unemployment allowance,had an impact on voters. When people threw out the SP five years ago,they thought only the BSP could replace the SP. This time,they wanted to remove the BSP and they wanted the SP as the Congress was not in a position to provide an alternative government.

Sunil Jain: Does it mean that populism pays? Or do you think through better policies at the central government level,you can impact the voters?

Sriprakash Jaiswal: In a democracy,every party has the right to announce measures for the public at large. But there should be a laxman rekha for such announcements,which all parties must follow. For example,within one week of forming the government,the SP announced that the unemployment allowance would be given to only those over 35. But most of the unemployed people are in the range of 20-35 years and they will not get the benefit. Announcements should have been made keeping in mind the financial health of UP. Congress never believes in such populism and it promises whatever it can deliver.

Ravish Tiwari: The Mayawati government used to complain that the Centre does not provide adequate funding to the state. How do you think the relationship between the SP and the Congress will shape up in the future?

Sriprakash Jaiswal: In the 11th five-year plan,more money was allocated to UP than what was demanded. The people of UP have given a fitting reply to false attacks by Mayawati against the Centre. We expect that the SP will not follow the same policy.

Sunil Jain: During the UP elections,one of your leaders had promised to increase reservation for Muslims. Dont you think promises made in elections should be realistic?

Sriprakash Jaiswal: The Muslim reservation was not promised but the Union Cabinet had approved 4.5 per cent reservation to Muslims. After the ongoing socio-economic and caste census,we will get the exact status of the communities. Then we will formulate the appropriate policy on reservation to Muslims. Today,if you go to any Muslim area in northern India,you will find that their condition is far worse than that of Dalits. Thus,they should be given reservation. When SC,ST and OBC get reservations,irrespective of electoral gain,we will do everything possible to work for minority upliftment.

DK Singh: How do think Brand Rahul fared in UP?

Sriprakash Jaiswal: The UP voters had already made up their mind that only the SP could replace the BSP as a viable government and vice versa. This perception did not change this time and voters did not want to waste their votes by voting Congress.

Ravish Tiwari: The MMDR Bill talks about sharing profits with the local communities in mining areas. Your comment?

Sriprakash Jaiswal: Each company working in mining areas must ensure that the benefits of industrialisation are shared with local communities. India wants to set an example in this for avoiding conflict arising out of mining.

Subhomoy Bhattacharjee: Since the beginning of the 11th Plan,there has been discussion on CILs production not be able to meet the requirement of the power sector. Yet after five years,we are still grappling with the issue.

Sriprakash Jaiswal: It was because CILs production was not sufficient to meet the requirement that the private sector was invited to invest in coal blocks. We have initiated a mechanism to increase coal production through private sector participation in mining. This year,CIL has increased its production by over four million tonnes and we are aiming at increasing production all the time.

Transcribed by Rupali Das