Union Power Minister Piyush Goyal today suggested that West Bengal set up a 5-member committee to look into high coal cess charged by the state government, which termed the move as an "encroachment" by the Centre.
"I suggest the state government to form a small committee ...To study with an open mind on how the state is imposing 25 per cent cess in coal extraction, which is different from other states where there is 14 per cent royalty system and what are the benefits and losses from it," Goyal said after a meeting with state Power Minister Shobandeb Chatterjee and power advisor Manish Gupta among others.
"If 14 per cent royalty which is imposed by other states is applied to West Bengal, I think the state will be benefitted as the production of coal will rise and overall revenue will rise and not fall. Power cost too will come down and help the industry," Goyal added.
The committee, which would be under the chairmanship of the state power secretary and include Coal India directors for marketing and finance should submit its report in four weeks, Goyal said.
The power department here called Goyal's statement an "encroachment in the state's domain" echoing West Bengal Chief Minister Mamata Banerjee accusation that the Centre was bulldozing the federal structure.
"Let the committee study and we will highlight our point of view on this subject," Chatterjee said.
"It (committee) is a suggestion. But, we see this an encroachment in the state's domain. In the state coal cess revenue is linked to development like primary education and others. It will hurt our revenues," said Gupta, a former power minister.
The Centre, he said, itself had raised coal cess by Rs 200 to total Rs 400 per tonne recently. In total they have raised by the cess by 300 per cent in a short period of time.
He added that if the Centre is keen on reducing coal price then it should reduce coal cess and freight cost of railway transportation instead of touching the state's revenue.
Goyal said he personally believed that lower cess will not result in lower revenue but in higher coal production, employment and development of ancillary industries.
State charges cess and royalty on coal. Earning from coal cess is Rs 700 crore to Rs 900 crore a year while royalty charge is a paltry Rs 7 per tonne.
On the country's largest coal block Deocha-Pachami, Goyal
said that "with so many players, there would be difficulties to mine the block. We are exploring and trying to provide some other blocks to some of the states which got the allocation in Deocha-Pachmi. The process is to simplify the mining operations in the Deocha Pachmi".
The block has been offered jointly to West Bengal, Bihar, Punjab, UP, Karnataka, Tamil Nadu and PSU Sutlej Jal Vidyut Nigam. A special purpose vehicle, Bengal Birbhum Coalfields Ltd, has been created to develop the block that has 2,000 MT of coal.
Goyal suggested that the state convert Kolaghat Thermal Power station, with a capacity of 1260 mw, to super critical plant in two phases. He also suggested converting Bandel Thermal Power station (455 MW) to super critical base power plant.
The step will help reduce power generation cost, coal consumption and enviornmental impact as both plants are more than 30 years old.
