After coal crisis, now row over rice mess

Not very long ago, the Centre had issued a stern notice to States not importing coal to tide over the fuel shortage for their thermal power plants. Hurry up and import at least 10 per cent of your coal needs or else face a further 5 per cent cut in Coal India Ltd (CIL) supplies to you, the Centre said. The All-India Power Engineers termed it a fraud and suggested to the States that they should not fall in the trap and, on the contrary, ask Centre to import the shortfall or pay the price difference.

Power generation costs would go up and consequently the tariff, the engineers warned. The shortage arose due to the sudden rise in power demand post-Covid recovery and CIL was not geared up to rise to the occasion. Yogi Adityanath's UP refused to import coal and it asked even PPP players not to go for foreign fuel. Incidentally, the power engineers body is also Lucknow based.

Here is a snapshot of the recent developments:

April 2022- Uttar Pradesh energy watchdog has questioned the proposal of the state power generation utility, UP Rajya Vidyut Utpadan Nigam (UPRVUN), to import coal for its thermal power plants due to depleting fuel inventory. UP Electricity Regulatory Commission (UPERC) secretary Sanjay Kumar Singh has notified the Nigam chairman seeking an immediate response to whether the imported coal, which has high GCV (gross calorific value), could be used in the old and depreciated units with lower GCV range for operations.

May 2022 - The All-India Power Engineers Federation (AIPEF) has demanded the power ministry to withdraw its April 28 directive to the State power generating companies to import 10 percent coal to overcome the present shortage of domestic coal supply.

In a letter to union power minister R K Singh, AIPEF Chairman Shailendra Dubey said if the States are forced to import coal then the Centre should bear the additional cost burden on the already distressed power distribution companies (Discoms) as also power consumers.

Further, he warned the coal import process, in the past, had been a subject of corruption and malpractices. The central decision to funnel away the accumulated revenues of the CIL – Rs 35,000 crore in 2016 – had crippled the development of new mines and augmenting the capacity of existing mines, Dubey said adding had the surplus been ploughed back into the coal mine sector, the present shortage would not have occurred. This was major on which there was no official word.

Meanwhile, Union Power Minister R K Singh dashed off a letter asking states to tell Gencos to take immediate steps to import coal, even as the Ministry issued a veiled threat to cut domestic coal supply by 5 per cent to force States to use 15 per cent imported coal.

Point to be noted – the target States included Haryana, Uttar Pradesh, Karnataka and West Bengal. The Government has even expressed concern that the tender process for coal import has either not started or not completed in these states. The import by States of coal for blending was not satisfactory. In 2018-19 a total of 21.4 million tonnes of coal were imported for blending. In 2019-20, the total import for blending was 23.8 million tonnes whereas in 2021-22, it was only 8.3 million tonnes. This is the cause of the stress in the availability of coal.

The Ministry of Power earlier advised State Gencos to import 10 per cent of coal requirement for blending purposes. States were advised to place orders by May 31 such that delivery of 50 per cent quantity is ensured by the end of June, 40 per cent by August 31 and remaining 10 per cent by October end.

Singh further asked that State Gencos may lift the entire quantity of coal offered under RCR - rail-cum-road - mode expeditiously to build coal stock. He stressed that in case of failure on either account, it would not be possible to give additional domestic coal to make up the shortfall.

Singh warned that the allocation, if not lifted, will be allocated to other needy State Gencos and went on to express the fear that shortage of coal in states during monsoon will adversely affect the power supply situation in the States if present state of affairs.

Then, the Power Engineers Association has accused the Centre of pressuring States to import coal to tide over the electricity supply crisis. The Centre should bear the additional cost on imports because the States are not to blame for the crisis, Association Chairman Shailendra Dube said.

He pointed out that the landing cost of imported coal at power plants works out to Rs 13,000 per tonne against the domestic one that costs Rs 10,000 a tonne. The cost generation could go up to 80 paise to Rs 1.10 per unit. Dube was aghast that the Union Power Ministry has warned the States of 5 per cent domestic supply cut, forcing them to import 15 per cent of the requirement.

Currently, the Centre's advice to State Gencos is to blend the fuel with 10 per cent imported coal. The Ministry gave an ultimatum to States to complete the process of coal import by May end and start blending with domestic coal by June 15 or face the quota cut. But, the twin factors of higher cost of imported coal and the consequent impact on the energy prices has led UP Power Corporation Limited (UPPCL) and UP Rajya Vidyut Utpadan Nigam (UPRVUN) to drag their feet on the contentious issue.

Now, a sudden realisation dawns on the Coal Ministry! In the backdrop of the states dragging feet on the contentious issue of importing coal for their thermal power projects, the Centre has mandated CIL to import the black commodity to supplement domestic supply. The power ministry has asked the CIL to import coal since multiple coal import tenders by the states would have spelt confusion apart from logistical challenges of arranging for railways rakes to transport the commodity from ports to the States.

Why this point was discussed when the Centre issued diktat to States to import and float tenders? No answers as there were any questions asked. Please note CIL had last imported coal in 2015. Come August, the government had sky-high praise for Coal India.

The PSU has played an important role in augmenting production of coal and recorded coal production of 207.09 MT during Apr-July 2022 from 166.56 MT during same period of FY 22, which shows a growth of 24.33 per cent.

In a further push, Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi announced that it will make more than 107 coal blocks available for auction. During the last four months CIL has set a new record by producing around 207-million tonne coal. The Ministry of Coal is targeting production of 900 million tonne this financial year and the target of CIL comes to 700 million tonne. By the year 2030, India's coal requirement will be 1.5 billion tonne, the minister stated.

No one knows as to what happened to the force the Centre applied on the States and the fate of the circulars on compulsory import of coal that died natural death. The fact that Yogi stood his ground is not widely reported. A classic case of a double engine not obeying the signal!

Cut to Telangana. The State where irrigation has improved a lot with the launch of a series of projects is now saddled with excess paddy and rice. The harsh summer crops led to the production of parboiled and broken rice. The Centre refused to lift these stocks and Public Distribution Minister Piyush Goyal even refused to entertain media questions on the Telangana issue.

The newest State's agriculture Minister even said he was literally heckled by Goyal who allegedly said the state's people must start to learn to eat broken rice. Traditionally, Telangana or Andhra Pradesh do not consume parboiled or broken rice unlike Bihar, Tamil Nadu and Kerala.

The Centre which once refused to procure Telangana rice now imposed a 20 per cent export duty on broken rice. Telangana has two crops a year which the Centre ought to realise and plan its procurement and advise the States. Telangana also officially lashed out at the Centre for playing hide and seek with the State.

Subsequently, Union Minister G Krishna Reddy admitted that the Centre stopped the procurement as the State did not implement the PM Garib Kalyan Anna Yojana Scheme though Delhi supplied rice for Rs 5/kg through the public distribution scheme network. Reddy also accused the State of inaction against rice millers when an FCI inspection found that about four lakh rice bags were missing. Then Reddy goes on to say that the millers who agreed to supply raw rice suddenly started giving parboiled rice. The Centre at one stage also accused the millers of black marketing the rice. But where does anyone indulge in black marketing when you have excess production and low official procurement?

Telangana has now suggested one-nation-one-procurement policy. The Centre needs to pragmatically assess the nation's food needs looking at the growing population (not just rising), changing food habits and so on. Food security has to be seen as part of federalism and not double engine politics. Let us keep raising questions since we are in democracy.

(The columnist is a Mumbai-based

media veteran now running many

news-based websites and a youtube channel known for his thought-provokingmessaging. The views expressed are personal)