NEW DELHI: Call it the ‘Coalgate’ effect. Coal minister Sriprakash Jaiswal has sought an extension for coal secretary Alok Perti, citing the need to maintain “continuity”. Perti, a 1977-batch IAS officer ofAssamcadre, is scheduled to retire on May 31.
Top government officials said the minister has argued that Perti needs to be retained beyond his superannuation to ensure that the ministry’s new initiatives are implemented smoothly. Extensions are usually granted for three months and can be renewed for a similar period but the government has so far avoided giving extension to any bureaucrat after retirement.
But the real reason, sources in the know said, was the government auditor’s report on allocation of 155 coal blocks. The report, the draft of which was first reported by ToI on March 22, said the government gave “undue benefit” of Rs 10.67 lakh crore to private and state-run entities by giving away coal blocks without bidding.
CAG is expected to table the final report in Parliament either in the second half of this month or during the monsoon session in August. The Opposition is expected to use the report to take a swipe at the government. That’ why, the sources said, Jaiswal wants Perti to continue since he has had a long stint in the ministry and would be able to frame response to the report better than a newcomer.
But senior ministry officials denied CAG report and said the ministry was in the throes of introduction a bidding regime for giving out coal blocks. “A new person would take time to understand things. Any change at this juncture could, thus, delay things,” an official said.
Another reason cited by Jaiswal for giving Perti an extension is the change of guard at Coal India Ltd (CIL). CIL last month got a full-time chairman after a gap of over a year when former Andhra cadre IAS officer Narsing Rao took charge.
The ministry has to sign fuel supply agreements with new power projects under an order from the Prime Minister’s Office. The agreements would envisage penalty on CIL if it fails to supply the committed quantity.
The company management faced a revolt from independent directors and the single-largest shareholder after the government -UKhedge fund TCI that holds 1% – against the PMO order. The ministry had to issue a Presidential directive to quell that rebellion and get the proposal passed by the CIL board.
CIL MAY REVIEW ‘FORCE MAJEURE’ CLAUSE IN FSAs
KOLKATA: A meeting between the chairmen and managing directors of Coal India (CIL) and NTPC here on Sunday last, the first such since a change of guard at CIL, failed to break ice over the issue of signing fuel supply agreements (FSAs), even as the discussions are being seen as a sign of a thaw between the two corporates.
A possibility that has emerged from the meeting is that CIL may need to take a relook at some of ‘force majeure’ clauses that it has set in the draft FSAs that power companies would need to sign with it. The meeting was held between Arup Roy Chowdhury, Chairman and Managing Director, NTPC, and S. Narsing Rao, Chairman and Managing Director of CIL.
Also present at the meeting were the Director (Operations) of NTPC and two of its executive directors, the director technical of CIL and a senior marketing official.
The meeting was held in the backdrop of the stalemate over the FSA issue, whereby CIL’s single largest customer, NTPC, has not yet signed a single FSA although CIL, in keeping with a government directive, had hammered out a draft and had put it up on its website within the stipulated deadline of April 20. The FSA is applicable to newly-commissioned power plants which have entered into power purchase agreements with distribution companies.
NTPC is learnt to have pressed for reverting to the earlier format of FSAs. However, CIL took the view that it was not possible to have two sets of FSAs — one for NTPC and another for others.
Some 20 FSA pacts have been sealed so far, including some with state power utilities and some with smaller private power producers.
More than the penalty clause, what is bothering NTPC are the ‘force majeure’ clauses that have been incorporated in the FSA, which, the power major feels, indemnifies CIL against every factor — avoidable and unavoidable — which can disrupt production and supplies. Following the discussion, a possibility has emerged that CIL may review these aspects.
The other major issue and an equally contentious one that figured during the talks was that of the change-over by CIL from January 1, to the gross calorific value (GCV) system of coal pricing against the earlier useful heat value (UHV) system. NTPC said that in the absence of inadequate infrastructure, issues such as joint sampling were becoming a problem.
FICCI WANTS GOVERNMENT TO END MONOPOLY OF COAL INDIA
HYDERABAD: Stating that the country’s energy security is under threat, Federation of Indian Chambers of Commerce and Industry (FICCI) said the Government should take steps to end the monopoly of CoalIndiaand allow private players in coal mining.
FICCI president R V Kanoria, who was here to attend the executive committee meeting of the industry body, said, “Coal exploration has to be accelerated. Private players should be allowed in coal mining to create healthy competition.”
He said that FICCI has suggested that the Government should reduce its stake in PSUs to less than 50 per cent which would be sufficient enough for it to be part of all major decision making processes in the company but at the same time would help make PSUs observe basic market discipline.
He said during the 12th five year plan, import dependence for petroleum products is likely to be as high as 80 per cent while for coal, it would be 28 per cent.
“As regards coal, today our imports are 15 per cent. By the end of the 12th plan, imports are going to be 28 per cent,” he said, adding currently power plants with 22,000 MW capacity are suffering due to lack of availability of coal.
Criticising the tariff structure, he said distribution sector is the weakest link in the power sector and retail tariffs are irrational.
“Cross-subsidies prevail among consumer categories due to populism which leads to virtually giving free power for the agricultural sector. Revision of tariff is often guided by political pressures than economic reasons. Rationalisation of tariff for industry by reducing the gap between industry and domestic tariff is necessary,” he observed.
As regards natural gas, the FICCI president said the development of natural gas industry inIndiawas being stymied by distortions in pricing mechanism.
According to him, the share of natural gas in the overall energy mix is only 10 per cent against the global average of 24 per cent.