With implementation of UDAY scheme, power and coal demand will grow: Coal Secretary Anil Swarup

In an interview with Ashish Pandey of Zee Digital Convergance Limited, Anil Swarup, Coal Secretary India, discusses in detail how the ministry managed to achieve an extraordinary turnaround for Coal India when it was facing a serious production crisis of its lifetime. He also believes that power and coal demand will grow soon, subsequent to implementation of UDAY scheme.

Here are the edited excerpts:

Q1. Coal India achieved staggering production numbers of 536.51 million tonnes (mt) during the financial year ended March 31, 2016. It is 8.5 percent up from the previous year. Are you satisfied with the achievement?

Anil Swarup . I think Coal India has done extremely well in coming up with this record production of coal especially when not many people expected them to reach the levels which they did. So, they have done wonderfully well. I am satisfied with the efforts that have been put into it.

Q2. How did Coal India, which faced one of its gravest production crisis during 2010-11 with almost no production growth, manage a turnaround? 

Anil Swarup . See, there are three factors which determine availability of coal in the country. There are other factors also, but these are the three major factors. First is availability of land, the second is environment and forest clearance and the third is availability of rakes to evacuate coal. So, as far as land availability was concerned, in the financial year 2015-16, Coal India got in position more than 5,000 hectares of land, which is a record. Never in the past have they had so much of land. This is twice as much they had in 2013-14. As far as forest clearance in concerned, they got it for more than 3,000 hectares of land which is many times more than what they did two years ago. And the third in terms of availability of rakes they got around 210 rakes per day which as compared to nearly 190 of previous year is more than 10 percent growth. All these three factors led to increased production by Coal India.

Q3. In an interview with a financial daily earlier this year you said that the task of the Ministry was more of a facilitator instead of a monitor, when it came to coal production. There was a clear division of work between the Ministry and Coal India with the Ministry taking the lead in resolving issues with the Ministry of Environment and Forest as well as the Railways. How was this division carried out?

Anil Swarup . In our context, we were very clear that there are certain issues which can better be resolved by the Government here and there are certain issues by the Coal India itself. For example, the actual digging part. The actual mining part has to be done by the people on spot or people in the Coal India. Whereas, if issues had to be resolved with the State Government with the Central Government machinery it would be better or easier for the Government people sitting here in Delhi to interface with the State Government as well as the Ministries of the Central Government and get them resolved. What we did was instead of holding meetings in Delhi we went to the States and sat with Chief Secretaries and other senior officers on a very regular basis once in two months conveyed a value proposition to them in terms of making them understand that if mining happens what is the benefit that will accrue to the State Governments. And all this actually did make a difference.

Q4. And, what about co-ordination with Railways?

Anil Swarup . (With) Railways (it) was phenomenon. I think a lot of credit for what we have done goes to Railways, having provided all the assistance that they could by way of rakes.

Q5. But now you are also facing a very unique problem of additional inventory. How are you planning to liquidate the surplus stocks?

Anil Swarup . See, it happens in any economy that you predict something and that doesn’t happen. So, the demand for power didn’t grow at the rate we assumed it would grow. Since the demand for power didn’t grow, demand for coal also didn’t grow. Consequently we are saddled with quite a lot of coal at the pit heads, more than 50 million tonnes (mt) and more than 30 million tonnes (mt) at the power houses. However, it is a good situation than what it was a year ago. We are better sitting on surplus than scarcity because we do believe that consequent to the implementation of UDAY scheme the demand for power will grow and so will the demand for coal. So, my understanding is that it’s a temporary phase when the demand is not so much. The surplus stocks are already getting liquidated. At the end of April, the stocks were already less than what they were on 31st March.

Q6. Do you see Steel and Cement sectors recovering soon?

Anil Swarup . Recovery in Steel sector is already visible. All other sectors will pick up as economy in general is picking up.

Q7. When should we expect Coal India buyback or Coal India divestment decision coming?

Anil Swarup . That’s a decision Ministry of Finance takes, we don’t take. These are discussions which keep happening. When a decision gets taken, I will tell you.

Q8. CIL’s consultancy arm CMPDI has invited applications from global firms for providing consultancy on formulating bid documents with regard to development of underground coal gasification projects. Can you throw light on the subject?

Anil Swarup . Gradually, the country will move towards cleaner coal technology. It will not impact the environment as much as coal does. We have identified around 8 blocks where coal gasification can take place. There are 4 lignite blocks and four coal blocks. These are blocks where we feel coal gasification can happen. That is why we are working on these documents to see how coal gasification can take place. We should be able to come out with tender document within this year.

Q9. Lastly, in a Facebook post recently you said, “Isn't it true that the 5 Cs (namely CBI, CVC, CAG, CIC and Courts) contribute substantially in creating an inhibiting environment for quick and effective decision making that impact development? Ironically all these institutions are not occupied by politicians but by Civil Servants." What actually did you mean by that?

Anil Swarup . See, it was an internal discussion that went into public domain. We keep having such discussions on how we should improve and evolve. As civil servants, we have to do a lot of introspection as to how we are contributing to the country and economy, how we are becoming roadblocks in the development. This was more of introspection. I am nobody to pass comments on somebody else!