Coal India sees 20% coal shortage in five years

Despite attempts to rope in the private sector to enhance coal production, the country will have to live with a shortage, which will touch 20% in the next five years, Coal India (CIL) chairman Narsing Rao said.

“By no means our domestic production is going to be beyond 795-800 million tonne (mt) by the end of the current Five Year Plan. Considering that the domestic demand for coal is expected to be at 1 billion tonne by end of that period, the shortage would be in the region of 200 mt,” Rao said.

“Though the production target for captive producers is 90 mt during the current Plan, it is doubtful whether they would be able to achieve that, considering the way they performed during the 11th Plan Period.”

The 11th Plan, which ended in March, envisaged 104 mt of coal production from 93 captive blocks. The actual was 36 mt.
Coal India, on its part, is committed to adding 180 mt to its annual production by 2016-17, he said.

This will increase production to 615 mt by 2016-17, compared to 435.84 mt in 2011-12. Rao indicated Coal India wouldn’t be entering any more changes to its re-drafted Fuel Supply Agreements. “We are ready to sign FSAs with 80% commitment. But it would be with 15% imported coal on cost plus model if the power companies are willing for it,” Rao said.

He said the company has also asked the government to expedite the law for land acquisition and rehabilitation so that acquiring land for projects could be easier and clear. “Environment and land acquisition are issues but can be handled. We have apprised the government the need for expediting the passing of Land Acquisition, Rehabilitation and Resettlement Bill,” he said.

He said that rail infrastructure should be improved as ideally coal should not be transported by road. At present, about 50% of coal is transported by Railways when it should be much more, Rao said.