Manmohan stymied over coal privatisation

The coal shortage in the country and the ruling alliance's inability to privatise coal mining have led to a series of high-level meetings.

Prime Minister Manmohan Singh presided over a brain storming session of senior coal and mining ministry officials where, sources said, he expressed his inability to move forward on coal privatisation.

It is estimated that the gap between coal availability from all sources and domestic demand for coalwould reach 95 million tonnes (mt) in 2011-12 from about 10.6 mt during 2004-05.

The gap has severely hit all sectors and especially the non-core sector as prority is given to supplying coal to power and other core sectors. "The small-scale industry has been particularly hit by the short supply," said an official. D Narayan Rao, minister of state, also attended the meeting.

Sources said Singh was apprised of the situation where about 30 coal mining projects were stuck due to various clearances. "The prime minister was of the view that a specific mechanism can be put in place for expediting clearances," said an official.

The officials also highlighted the fact that for the past one year no allocation of coal blocks have been made. The screening committee under coal secretary, which is responsible for awarding the blocks, has not met due to the political situation.

Users are forced to resort to imports which have reached an average level of 22 million tonne per annum (mtpa) over the last few years. Out of this, 12 mmtpa is coking coal is used by the steel sector.

The issue of the appointment of a full time chairman and managing director for Coal India Ltd was also highlighted.

The coal supply situation has been a cause of worry for the government for about a year now with fortnightly review meetings being held by Cabinet Secretary BK Chaturvedi.