Another coal scam brewing? Don't ignore whistle blowers
The government continues to look for solutions in imported coal-based power plants and by trying to revive units under stress or in NCLT proceedings
Politicians can keep blaming one another for the ongoing power crisis but the people working in the industry do not. The All-India Power Engineers Federation (AIPEF) has been sounding alarm bells for long about the impending power crisis well before the heat wave began to sweep across the country.
Federation chairman Shailendra Dubey wrote to Union Power Minister RK Singh demanding a cap be put on the alleged "profiteering" by the independent power producers (IPP) way back in October last. He even called for an expert committee to fix responsibility for the crisis in view of what he called the brazen "black marketing" by private power producers in the backdrop of the coal crisis.
Looks, this was not taken seriously. Now, Dubey has cautioned against liberal use of imported coal by various State power generating companies and asked the power ministry to withdraw its April 28 directive to the State power generating companies to import 10 per cent coal to overcome the present shortage of domestic coal supply. His fresh letter to the Minister raised many issues - most important of them all being the repetition of what had come to be known as the coalgate scam, one of the two major crises that the UPA-2 had to grapple with and bite the dust in 2014 general elections.
"There are recorded instances of over-invoicing of imported coal and fudging of coal testing/GCV (gross calorific value) determination at the loading port. These cases were taken up by the Department of Revenue intelligence (DRI) under the union finance ministry. The DRI pursued these cases before the Bombay High Court, and later before the Supreme Court," Dubey recalled.
He blamed the policy failure and lack of coordination between different ministries and the crisis worsened due to the shortage of railway wagons to transport coal. The railways ministry data clearly showed the gap between demand and supply of the rakes – against the daily demand of 441 rakes, the availability is only 405. Dubey gave us another shocker that the Centre's decision to funnel away the accumulated revenues of the Coal Indian Limited (CIL) – Rs 35,000 crore in 2016 – had crippled the development of new mines and augmenting the capacity of existing mines. Moreover the post of CMD of CIL was kept vacant for too long.
One key aspect the AIPEF claimed was that most of the domestic thermal stations envisaged, designed and constructed over the past decades were on the basis of domestic coal from linked mines. The risk of temperature variations in boilers due to uneven mixing would increase the incidences of boiler tube leakage.
"Let us accept the reality that though there may not be more of new coal-based plants in the country yet we are going to depend heavily on coal-based generation for next 3-4 decades till there are proven alternatives of 24x7 energy sources," says Former NTPC CMD RS Sharma says in a column in Biznewsconnect portal.
Hence, he calls for efficient operation of power plants, efficient use of coal and C02 capture to and its use as value added products in the intervening period has become much more critical now towards the pursuit of net zero emission. So, the crisis is real and pretty much serious. We sincerely hope that the rosy picture being painted by the Centre at various levels is real and pray that the engineers' federation's fears do not come true.
Meanwhile, the government continues to look for solutions in imported coal-based power plants and by trying to revive units under stress or in NCLT proceedings. The Power Finance Corporation (PFC) and Rural Electrification Corporation have been directed to arrange short term loans for a period of six months with adequate safeguards, to help them import coal.
This takes us back to the core issue that we have been discussing in these columns. The Sab Saath…must be practised at every level. Unfortunately, this is not happening. Planning and coordination have been the greatest victims. While it has become fashionable to the policy paralysis of the previous regimes, precious little seems to have been done to cure that disease.
What is even more alarming in this power crisis is the race for replicating the Delhi Model of free electric supply. With the rising cost of production, the subsidy cost will also rise and ultimately further burden the honest taxpayer. The taxpayer is already a squeezed lemon. The sooner the nation's financial planners realise this is better for the country or else…Nobody wants an upsurge here. Be it the stock markets or the socio-political scenario, sentiments matter. Market analysts always talk of senti-meters at Dalal Street. Sentiments have been causing major political upheavals and all that one has to do is look around and shed, what again we have been saying, the ostrich-like behaviour.
Speaking of sentiments, there has also been a debate on the timing of the sudden change in the RBI's monetary policy when the government has come out with the largest IPO by offloading 3.5 per cent stake in LIC. The hike in repo rate by 40 basis points, for the first time in over two years, has hit the stock market sentiment and in turn the investment by FIIs.
Was this the case of the right hand not knowing what the left hand is doing? After dragging the LIC IPO subscriptions, the market sentiment is bound to impact the listing on Tuesday. The cascading effect of the repo rate on the retail interest rates will also negatively impact the consumer loan offtake be it for home or automobiles. While the skyrocketing petrol prices seem to have frozen at Rs 120/litre levels, the LPG cost has zoomed to Rs 1,000/cylinder.
Another major decision by the government on rescinding its wheat export policy has come in for a lot of criticism for the lack of planning. Critics said the government had not taken into account the domestic requirement before promising the world that we have plenty of food grains that can be exported to needy countries.
This 'assurance' came after the world started feeling the punch, not just a pinch, in the wake of the Russian attack on Ukraine. Now the government tries to reassure the nation that there is no wheat crisis. It justifies the ban on exports by taking shelter under food security. Obviously, doubts would arise if the government had done enough consultations before announcing the exports and then banning them.
The Sab Ka Saath….policy must be visible in implementation beyond ideating and preaching. The talk of inclusive governance has to be seen in action, much more than in public relations exercise. It does not take long for the perceptions and sentiments to change.
(The author is a Mumbai-based media veteran known for his thought-provoking messaging)