Coal India coal import plans face opposition

September 14th, 2012 - 1:42 pm ICT by IANS  

Kolkata, Sep 14 (IANS) Coal India’s plan to import coal following a government diktat has raised the hackles of workers’ unions and former top officials of the state-run firm who say the move is in fact towards privatisation of the coal sector.

“We have been opposing the government’s plan to privatise the coal sector in the country. Its decision to import coal through Coal India Limited (CIL) to meet the FSA commitment is a move to privatise the sector,” Shymal Dutta, secretary of The All India Coal Workers’ Federation (AICWF), told IANS.

“We will oppose the import of coal,” said Dutta while the hue and cry over coal block allocation to private companies go on.

As more than half of the nation’s electricity is generated with coal, the world’s largest coal miner is under scrutiny for its inability to raise output to meet the growing demand of power utilities. In a bid to fill the supply shortage, the Prime Minister’s Office (PMO) has through a presidential directive asked the miner to sign fuel supply agreements (FSAs) to meet at least 80 percent of the coal requirement of power projects.

Under the modified FSAs to be inked with power firms, the coal major will source 65 percent from domestic output and 15 percent through imports to meet the assured supply of the contracted quantity.

But former officials and independent directors of the Coal India board have questioned the rationale behind the government’s decision and cautioned the miner on this.

Independent board member and Indian Institute of Management (Ahmedabad) Director S.K. Barua has cautioned the company against signing revised FSAs with companies named in the Comptroller and Auditor General (CAG) report.

Barua has reportedly said that “FSAs are clearly designed to bestow favour on chosen projects and power producers.”

Speaking in the same vein, a former CIL chairman told IANS: “The primary job of Coal India is to produce and sell coal. Why is the miner being converted into a coal trader?”

“Why would the required coal for power firms be imported through the coal major? This is not the right move. Its primary job of producing the fuel would suffer,” said the ex-official, who asked not to be named.

Said Dutta: “We have enough coal in the country to meet the requirement of the power plants.”

The former chairman said the government should allow trading houses to import the coal and sell it directly to the electricity producers.

Power producers could also be permitted to import the required coal from overseas, he added.

Hemant Kanoria, chairman of power generation and distribution company DPSC, is also sceptical about the government decision.

“Coal India needs to focus more on raising productivity and production to meet the requirement of the power firms by domestic coal. Importing coal through it is not a good idea,” said Kanoria.

When contacted, a CIL director, who wished not to be named, said: “The government has asked us to import coal. We have to obey the directive.”

Coal India produces more than 80 percent of the nation’s coal, but it is facing serious hurdles to raising output, including delays in acquiring land and receiving environmental approval.

(Mithun Dasgupta can be contacted at

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