PMO plays mediator as ministries spar

After a war of words between the secretaries of coal and power, the Prime Minister’s Office (PMO) has called for an urgent meeting between the two warring ministries to discuss the raging issues pertaining to fuel supply agreement (FSA) and coal price pooling.

The key meeting, scheduled for October 5 would be chaired by Pulok Chatterji, principal secretary to prime minister Manmohan Singh. Burning issues like progress report of the inter-ministerial group (IMG) on coal block allocation and government’s reply to the Comptroller General of India (CAG) are slated to be discussed in the meeting.

The IMG has recommended deallocation of seven coal blocks after series of meetings with all stake holders and had reviewed the performance of 29 companies in developing coal blocks allocated to them for captive use. However, some companies have already moved Delhi high court against the government decision.

Sources also claim that the PMO has asked for update on signing of new fuel supply agreement by Coal India Limited (CIL).

The ministry of power wants Coal India Ltd to sign FSAs with power developers with a penalty clause for the PSU in case it fails to provide 80% fuel security to the power plants.

Besides, launching of new coal block allocation policy and auction would also be discussed.

Prime minister’s office is also keen on discussing other important issue of auction and constitution of an empowered group along with lines of FIPB for single window clearances.

DNA had reported on Wednesday the exchange of letters between coal secretary SK Srivastav and power secretary P Uma Shankar over the issue of FSA and pooling of coal prices.

While Srivastav has accused power secretary of mooting policies that are likely to harm the financial interests of Coal India Ltd and benefit the private sector power developers, Shankar on the other hand has asked the ministry of coal and Coal India to ‘do some soul searching on their responsibility and commitment’.

The Prime Minister’s Office has so far favoured the demands of the power ministry and urged the coal ministry to look for ways to meet the coal requirement of the power sector. However, after the coalgate, that has established that the private sector companies have benefited at the cost of Coal India Ltd in allocation of coal blocks, it would be difficult for the PMO to push Coal India for anything that will harm the interests of the PSU and benefit the private sector companies.