Friday, December 16, 2011

Shortage of Coal- Conspiracy Theories

Shortage of Coal: Conspiracy Theories
The rather candid acceptance sometime in Oct,before Diwali, by Mr SP Jaiswal, the Union Coal Minister regarding corruption, inefficiencies and low productivity in Coal India Ltd raises hopes that the government is at last willing to do a little introspection.

I was wondering whether the statement was just a canard or is the minister serious about 'Diwali cleaning' ?
Just then a little bird perched itself on the railing of my balcony. As I sipped my cup of tea, it told me that there were various conspiracies by different agencies to hurt the thermal power industry and further their own vested interests. It went on to tell me that following forces were responsible for the state of thermal power generation.
a. Foreign companies' stake in developing India's nuclear power plants. Some foreign companies were looking forward to getting multi-billion dollar contracts for setting up nuclear power plants in India. These plans have received a setback due to the recent protests against setting up of nuclear power plants in various parts of the country.
Considering the investments and returns at stake, I would not put it beyond these companies to try and disrupt the coal supplies and run the thermal power plants dry. This would create a climate of power shortage, influencing public opinion in favour of nuclear-based plants. The key protestors would be marginalised and the government would be forced to actively consider expediting nuclear power plant projects. The foreign companies could then step in as 'saviours' to build our plants and charge a premium towards expediting the projects. I would also not be surprised if emissions from thermal plants were brought under hard scrutiny during the next environmental conference.
b. China's long-term approach and their belief in Sun Tzu's dictum "… those skilled in war subdue the enemy's army without battle .... They conquer by strategy". The Chinese strategy to undermine India's growth story is to hit at the driver for growth - power generation. The Chinese could be covertly creating conditions that is impeding coal production in our country, leading to a crisis situation. The Indian companies have been quite agile in acquiring coal mines overseas. However, I see a time coming when China, with its trade-surplus muscle will overtly attempt to bully the host countries and hinder deals with Indian corporates. Its attempted muscle flexing in the India-Vietnam oil exploration in the South China Sea is a case in point.
c. Government doing an Air India to Coal India Ltd. The manner in which private airlines grew in size at the cost of Air India/Indian Airlines as per CAG reports, the government is trying to push private players in coal mining by going slow on improving efficiencies in CIL. Further, is the environment ministry taking urgent steps for checking illegal mining as well as preparing alternatives and strict guidelines for 'rehabilitation' after mining in 'no-go' areas.
The above theories are a throwback to the good 'old' days when every setback had a 'foreign' hand. I thanked the little bird profusely for enlightening me. Perhaps, there IS a 'foreign' hand.

1 comment:

  1. A development after the blog was written that the Australian government offered to sell enriched uranium for our nuclear power plants. Julia Gillard says that Australia wants to be part of the India growth story.

    A number of Indian power companies had acquired stakes in coal mines, mostly in Indonesia and Australia.This would have assured them supplies of coal for their power plants and brought their costs down.

    However now, the same Australian government has imposed duty on coal that can be exported from Australia by Indian companies having a stake in the mines acquired by them. This has made operating the power plants commercially unviable for the companies.

    The move points towards the validity of the "conspiracy theory".

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