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PMO initiative to end coal supply logjam runs into rough weather

There is no end in sight to the slugfest between the power and coal ministries over the terms of supply of fuel to upcoming coal-fired projects

Written by Priyadarshi Siddhanta | New Delhi |
July 7, 2012 1:39:18 am

There is no end in sight to the slugfest between the power and coal ministries over the terms of supply of fuel to upcoming coal-fired projects.

At a crucial meeting called by the Prime Minister’s Office (PMO) here,the power ministry put its foot down and said it would not accept any lowering of the coal supply to a trigger level of 65 per cent during the initial years of the Twelfth Plan period and has made a renewed pitch for retaining the trigger level at 80 per cent to safeguard adequate fuel supplies. The trigger levels essentially signal the cut-off point below which the supplier of coal — state-owned Coal India Ltd — will be liable to pay penalties.

Complicating matter further,the environment ministry representatives who attended Friday’s PMO meeting also refused to entertain the demand of the coal ministry to permit 25 per cent capacity expansion from Coal India’s existing mines without public hearings in a bid to boost supplies in the immediate future. The environment ministry maintained the stance that rules cannot be tweaked for CIL.

At the meeting convened by PMO Joint Secretary Shatrughna Singh this afternoon,the power ministry officials said the CIL will have to maintain the supply trigger level at 80 per cent,failing which the coal major should bridge the deficit by importing fuel. They said the power companies cannot be left guessing on the quantum of supply they will get from CIL. Earlier,in a meeting on June 23 convened by the PMO’s Principal Secretary Pulok Chatterji,the coal ministry had agreed to the PSU maintaining a trigger level of 65 per cent for 2012-13,2013-14 and 2014-15,which was to subsequently go up to 80 per cent in 2016-17,the terminal year of the Plan period.

Adding to the state-run coal firm’s woes,the ministry of environment and forest (MoEF) officials conveyed their inability to accord approval to CIL for enhancing production form thirteen projects without resorting to public hearings. The coal ministry officials pointed out that public hearings for these projects have been conducted earlier and if this exemption to hearings are allowed,then they can produce an additional 145.91 Million Tonne by 2016-17. However,this issue was considered by the Group of Ministers (GoM) constituted to streamline the process of green clearances for stranded coal projects in its meeting on September 20,2011,wherein the MoEF officials are understood to have agreed to consider such projects on case-to-case basis.

The PMO,in a note on July 2,had also cited that Section 7(II) of the Environment Impact Notification 2006 provides for exemption of public hearing for expansion projects for projects which have obtained environment clearances (EC) earlier after due diligence. However,the MoEF in its office memorandums on June 3,2009,and August 24,2009,have conveyed that no exemption from public hearings can be given.

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