Read the coal ministry's 2010-11 annual report: "A need was felt for evolving an objective and transparent system of allocation of coal blocks. Accordingly, the Mines and Minerals (Development and Regulation) Act has been amended to provide for introduction of competitive bidding system for allocation of coal blocks for captive use."
The amendment came on September 9, 2010, and the competitive bidding procedure was finalised on February 2, 2012. It is like closing the stable door after the horse has bolted!
Two decades after 1991, it dawned on the ministry that competition and transparency should be the true drivers of efficiency in the economy! It was a typical case of lack of coordination, partly unintended and partly deliberate, on the part of the various central ministries in responding to an emerging situation.
During the first five years of the UPA rule, the environment ministry cleared 1,92,913 mw of new thermal power projects.
It was already in the process of clearing another 5,09,000 mw of thermal projects, mostly coal-based. The total additional coal-based generation capacity thus considered would be six times the existing capacity and three times the capacity projected by Planning Commission till 2031! About 70% of the coal needed for this was to come from indigenous sources.
Since the coal PSUs could not have mustered resources to cope with this unprecedented 'coal rush', the power companies, both public and private, sought allotment of captive blocks.
In the laissez faire philosophy of the UPA, neither the power ministry nor the coal ministry thought it fit to regulate the demand for power and coal. Nor were they prudent enough to insist on transparency and competition to safeguard public interest.
It was a free-for-all situation during 2004-10, which, incidentally, suited the politicians and private companies to make hay. None in the government was in a hurry to upset this applecart. Meanwhile, without facing any competition, a few influential private players laid siege to a large number of coal blocks to their advantage.
The coalgate is there to see, despite the government positioning itself in its usual denial mode
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