Why Rs 8,000 crore rehabilitation plan for Jharia Coalfield is not working?
Industrialist turned politician S Bagrodia, the Minister of State for Coal, took charge of the Coal Ministry in April this year. Within a short span of seven months he has been witness to ups and downs in the Indian economy, largely due to the global recession and its impact on the coal sector.
In an interview with Business Line, Mr Bagrodia explained how the Ministry structured its policies to adjust to falling industrial confidence. The Minister also outlined the steps being taken by coal companies to turn more consumer-friendly.
Excerpts from the interview:
You took charge of the Coal Ministry in April, when the economy was said to be booming. However, now the situation is quite different and we are witnessing the impact of the global economic crisis on the domestic economy. To what extent has the Indian coal sector been affected by the global meltdown?
The global economic crisis has not had any major impact on the domestic coal sector because most of the coal produced in India is used for domestic power generation. However, the international situation is impacting the availability of coking coal as well as its prices.
Coking coal, used for making steel, is mostly imported by steel manufacturers. As a result of the slowdown, import of coking coal is likely to drop. However, the Coal India subsidiary, Bharat Coking Coal Limited (BCCL), which produces coking coal, is not likely to be affected as its entire production will get utilised. There will certainly be that much demand.
Every industry is talking about a credit crunch in the economy and poor cash-flow. Are there any strategies that the public sector coal companies are putting into place to make their services more consumer-friendly?
Yes, they are trying to do exactly that. There are serious problems and many companies that need coal sometimes do not have the ready money to purchase it. Very recently, coal companies have taken some new initiatives.
In the earlier system, if you went to Coal India, they would ask you to pay in advance. But now the new system is that the consumers do not have to pay upfront. A letter of credit from the bank is enough. We understand that there are problems in getting credit.
There has been a lot of concern about the continuing underground fires in the Jharia mines. Earlier, initiatives were taken to contain the fires, but these did not all succeed. Are there any fresh measures planned to extinguish the fire and save the coal resources?
The fire in Jharia mines is a 100-year old problem. Originally, there were 67 fires. Later, another 10 new fire spots came up. Of the total 77, it was possible to extinguish 10, bringing the number back to 67.
What are the efforts being made to rehabilitate the people living in the Jharia area?
The Ministry has a Rs 8,000-crore rehabilitation plan that it wants to implement. However, we are not able to roll it out as, for various reasons, the people are not willing to leave the place and settle in a different location. For rehabilitation, 300 houses have already been built, but of those, there have been takers only for 100 houses. People are just not willing to move away. Adding to the problem is that there are more and more people coming to Jharia and settling there.
We have also appealed to the non-government organisations (NGOs) working in this area, the local political leaders, local governments and panchayats to arrange to move these people to safer places, saying we would bear the expenses for it. Still, most people are not willing to move.
What about the future uses of coal? There have been earlier efforts by the Ministry to set up a project to make oil from coal. What is the progress on that front?
We have given coal blocks to the ONGC and they are still experimenting with it. However, this process was once necessary only for South Africa where, because of sanctions, they could not get the necessary oil. But the economic viability of the project has to be established. As far as India is concerned, when there is already shortage of coal, there is no need to go in for such novel projects.
