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Report No. 7 of 2012-13 – Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production, Ministry of Coal
Overview
Coal is the most important indigenous source of energy for Indian economy with a geological reserve of 2,85,863 million tonne and more than half of the current commercial energy is met by coal. The widening gap between the demand and domestic production of coal and consequent increase in coal imports to fill up the gap warranted a study to examine the adequacy and effectiveness of the action taken by Coal India Limited (CIL) and the Ministry of Coal (MOC) for augmentation of coal production. This assumes significance as there are instances where capacities in the power sector have been lying idle or facing difficulties in augmentation of capacity for want of coal. Further, though the Government of India (GOI) has notified certain sectors which may undertake captive mining of coal, the process of allocation of coal mines should be objective and transparent.
For increasing the production of coal, the Expert Committee, chaired by Shri T.L. Sankar, on Road Map for Coal Sector Reforms (December 2005) had recommended that the drilling capacity of Central Mine Planning and Design Institute Limited (CMPDIL) be enhanced to at least 15 lakh metre per annum. As against it, the expected drilling capacity of CMPDIL was only 3.44 lakh metre in 2011-12. The rate of increase in production of coal by CIL during XI plan period remained far below the target envisaged by the Planning Commission.
The low production was due to inadequate drilling capacities, backlog in overburden removal, mismatch between excavation and transportation capacities, low availability and under-utilisation of Heavy Earth Moving Machinery (HEMM) etc. Efforts of the MOC to increase production by de-reservation of 48 coal blocks of CIL and allocating the same to captive consumers did not yield the desired results as no production could commence from these blocks. New Coal Distribution Policy 2007 envisaged better distribution of coal to small and medium consumers. However, no monitoring mechanism was put in place in CIL for verification of end use of coal.