Pratim Ranjan Bose
Expectation is essential
for growth. But setting unrealistic goals may prove deadly, in public policy formulations.
The billions of dollars that sunk in stranded power assets in India is a grim
reminder of the UPA (2004-2014) government’s overambitious projections on coal availability.
He has zeroed-in on improving
coal production and evacuation logistics to meet India ’s growing energy needs. And,
he knows that there are not much low-hanging fruits left to reach this goal.
Yet, when it comes to projecting coal
output in next five years of NDA term (2014-19); Swarup churns out numbers that
might force even the Chinese to hang their head in shame.
World’s highest growth
rate?
Coal production, he says, will
grow by three-fold from approximately 550 million tonne (mt) to 1.5 billion
tonne (bt) in 2020 at nearly 22 per cent compounded annual growth rate (CAGR).
Leave alone UPA’s growth projections,
this is double the phenomenal 11 per cent CAGR achieved by China while trebling
coal production (from one billion tonne to three billion tonne) in 10 years,
between 2000 and 2010.
To achieve this goal, the
government is pushing the national miner, Coal India (CIL), to double output
from an anticipated 500 mt in 2014-15 to one billion tonne, at 15 per cent CAGR.
Incidentally, not many large miners
in the world (excepting in single-party ruled China ), could sustain even 9 per
cent output growth for five year term, in the recent history.
That is not all. The captive
sector that added only 15 mt production in last 15 years, is now expected to
grow from 40 plus million tonne to 500 mt in five years. Don’t try to count the
growth numbers because it might send your head spinning.
Of the total, 350 mt is expected
from 101 captive assets (including 40 odd operating mines) that will be
auctioned between March and April this year. The additional 103 assets that
would be auctioned in the next fiscal is projected to add another 150 mt in
less than four years in 2020.
For records the total production
from the 204 captive assets – which were de-allocated by an apex court order in
October 2014 - was estimated at 100 mt in 2017.
Basis of the claim
The production outlook may appear
a bit too tall to digest. But Swarup is unfazed.
He believes a coordinated
approach between key ministries (including the all important ministry of
environment of forests); creation of an enabling environment and; strict
project monitoring can make it possible.
The government has already
directed CIL to list key projects to be brought under a comprehensive
development plan.
CIL is mentored to improve its
production processes. An advisory panel feels introduction of right systems can
increase output of the existing mines by 150 mt a year. Focus is also laid on
improving underground production from a dismal 8-9 per cent of total, to more reasonable
levels.
An enabling environment coupled
with strict asset utilisation guidelines will ensure full utilisation of
captive assets, Swarup is confident.
Holes in argument
No one would doubt Swarup’s
ability and intent. There is also little doubt that some of the steps initiated
by the Narendra Modi government will have a positive impact on coal
availability outlook.
But, that does not justify such
astronomical growth projections.
The problem is, excepting in
environment – which is a joint responsibility of both the State and the India
government – the rest are more of a State subject. And, the State response is
completely dependent on the ground political realities that often keep changing from district to district.
Talcher in Odisha and Korba in
Chhattishgarh – the two most prolific coal reserves in the country – often respond
differently to any strike call. This is irrespective of the fact that the
governments in both the States are pro-industry and private contract miners contribute
majority of CIL’s production in both the regions.
There is also difference between
the approach of local population towards land acquisition. While people of
Maharashtra are more concerned about the cash offer; operations came to nearly
standstill at Asia ’s largest opencast mine at
Gevra in Chhattishgarh two years ago, as villagers refused to move without jobs
for everyone.
Demand for jobs is most prominent
in Odisha, where people move in cartel to ensure job for the entire neighbour
and their extended families. This is the reason why captive mining did not take
off in the State.
Any dramatic rise in coal
production will impact lives in three or four States which are home to India ’s poorest
of poors and, majority of the forest cover. And, no State government – even if ruled by Modi’s BJP - should dare to steamroll local aspiration to help fuel the
growth of rest of India .
The problem can only be mitigated
through an institutional approach that would directly benefit people of the
land, and create a test case for sustainable development. But Swarup has no such
promises in store at this juncture.
He doesn’t foresee land acquisition
to be a major problem, excepting in West Bengal
(also coal bearing). And, the new land ordinance will make it even easier. He
disagrees that land acquisition was a prime hurdle for growth of mining - be it
captive or commercial.
Once a part of Project Monitoring
Group in the cabinet secretariat, Swarup banks on his persuasion skills to influence
States in granting environment and forest clearances to the mining projects on
a fast forward mode.
He is out to beat the world
record in coal production growth. Only time would tell how far he was successful.
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