Govt awards CTL coal blocks in a hurry!! What could be the reason behind??

On February 27, 2009 Ministry of Coal has awarded 2 coal blocks in Orissa for CTL projects to SETCL and JSPL. The IMG (Inter Ministerial Group) has however selected these two bidders taking all the criteria but has never given any clear order of preference.

Of late, Govt wanted to award these coal blocks on the basis of profit sharing and has sought legal advice from the law ministry. The law ministry clearly said that these criteria can not be a part of the contract document as this is proposed after the last date of application. Though the govt asked for profit sharing clause later at a stage of making presentation before the IMG, the law ministry advised the Ministry of coal to call for fresh proposals if it wants to introduce profit sharing as one of the clause for coal block allocation.

But, calling for fresh proposal would have definitely taken some time and fresh controversies would have been surfaced .Looking at these issues, Govt did not prefer to have fresh bidding on CTL.

Before awarding CTL blocks, Govt did have some options.

a. One of the options was to hold back on CTL allocation as the economics do not favour a CTL coal block allocation at this juncture. The world economy is passing through a phrase of slow down and the oil is well below the price of economic production of oil from CTL projects ( around $80 as predicted by the experts).The other concern is that if the project is delayed and the amendments to MMDR act is passed in favour of competitive bidding of the coal blocks , then the whole exercise will have been repeated .

b. The second option was that one party can be allocated coal block for development. As IMG has not set any preference, it is argued that the other party might raise some concerns about the allocation. Single allocation in favour of a party could have been made after a consensus from the competent authority.

c. The third option was to allocate two blocks to two short listed parties as their first choice differs from each other. . SETSL have indicated their first preference for the North of Arkhapal-Srirampur block, whereas JSPL have indicated their first preference for the Ramchandi Promotional block.

d. The last option was to return the proposal to IMG for a further fine tuning of parties so as to make a final decision on allocation of one coal block to one party. It would have taken some more time but could have been the right solution .

But the government took the third option to allocate two coal blocks to two parties.

It raises serious concerns on the part of the government. The timing of the decision (when the elections are only 2 months far away) and the basis of allocation. As everyone knows that CTL project is at a very nascent stage of development and the technology is not well established besides few successful demonstrations in South Africa. The quality of Indian coal and its accessibility to the technology proposed is still under development phase. What could be the reason behind to allocate 2 coal blocks. By doing this government unnecessarily blocked 2 huge coal resources for a project whose veracity is not well established till yet.

Though government has made strict provisions that coal from the project will be used strictly for CTL and can not be diverted, but then the decision to allocate the coal blocks certainly comes under scrutiny.

No doubt, the project developers have to bear all risks involved but when it is explicitly mentioned that one coal block will be allocated to one project developer, to award 2 coal blocks is not a wise decision. As the resources are limited, the country needs to take right decision at the right time but the decision to allocate these coal blocks in a hurry significantly points towards some under the carpet theory which could not be ignored.

What is your opinion on this issue? Please contribute

Should NTPC be allowed to offer more power to host state??

According to Gadgil formula, for any central power project, the home state gets 10% as preferential allocation, 15% is kept unallocated at the disposal of the Centre and the balance 75% is allocated to beneficiary states, including the home state, on the basis of their energy consumption and central plan allocation during the previous five years.

Thus, for any power project NTPC could offer upto 30% of power for any hosting state, where as ultra mega power projects being developed by Reliance Power (Sasan) and Tata Power (Mundra) have made higher allocation of 37.5% and 47.5%, respectively, to the home states.

NTPC has proposed a revision in the existing method so as to allocate more power to create a level playing field with private generators. It would help NTPC getting green field power projects from states. If the proposal is approved, NTPC can offer 45% of the power generated to the host state.

The states are demanding more power allocation in lieu of fuel linkage, land acquisition and water linkage etc. But, the big question is, should NTPC be allowed to offer more allocation to the host state of the power plants?

States are demanding more power quota so as to trade and earn huge revenue out of it. It is not that states want this power to mitigate any deficit situation of power. Trading of power could earn them above Rs 10 in peak demand seasons. Even when the host state needs power for its peak shortages, it resorts to load shedding and in the same time it sells power to other states at a higher rate so as to fill its revenue kitty. This happens in case of hilly states and states where hydel projects are situated. The allocated quota for the states is used for trading.

In my opinion, NTPC being a central government company should not do this so as to beg projects. It will definitely create an imbalance situation for different regions in India. Even state governments are accusing the central government for partiality in case of distribution of unallocated quotas of power from the central generating stations. Central govt. is being accused of providing more power to the state where its party is in power and neglects the other states.

If UMPP is taken into consideration or otherwise any such coal pit head projects, it is known that coal fields are basically situated in eastern states ( Jharkhand, Orissa,WB,Chhatisgarh etc) where the demand for power is comparatively low. If projects have to come up at the eastern states because of its proximity to coal fields, then the states having coal fields will have surplus power and the northern region will be power deficit as most of the demand comes from these states. It will create a situation where in the spot prices of power would move up in peaking time and it is bound to create regional imbalances .

At best NTPC should find options to enter into JVs with state generating companies so as to develop power plants in the state with equity participation from state and central utilities.

Power ministry is currently mulling over the idea to allow NTPC to offer more power to the host state. But, rather doing any good to the country, it would bring more harm to the central government. It is a fact that NTPC is well behind the private developers when it comes to UMPP projects, but NTPC should look inside and try to rectify the system which holds it back to offer good prices when it is having all advantages of expertise, experience and the backing of central governments at large.

What is your opinion on this issue, please contribute.

Captive Coal Production: The Road Ahead..

Captive is a bad word but a good option at least in the coal production. Though 198 coal blocks of reserves over 40 billion tones were allocated till now, production could only commence from 25 blocks. The share of coal production is still below 10% of the total coal produced in the country. Problems are aplenty for coal production through captive blocks and solutions few but the road ahead is slowly and steadily emerging.

Even a 100 percent FDI in captive coal failed to provide the right incentives for players to ramp up the production. It clearly shows a lack of seriousness and inability in case of captive miners. What could be the way forward to resolve all the challenges faced by captive coal miners? Is there any scope of changing the policies? How could be the captive mining be incentivised so as to attract serious players in the field.

The government should be flexible enough to change rules and regulations so as to allot explored blocks to captive developers. Government takes first initiative allowing power companies to use surplus coal available to similar end use project of same company as in case of Sasan UMPP. The earlier norms was to transfer the excess coal to CIL.

Even the identified explored blocks which are retained by CIL to be mined in 12^th plan and onwards must be awarded to private developers for captive development as the gap between demand and supply is growing at an alarming scale. India should take aggressive steps to address this issue and it might probably one of alternative solution to address coal issues in India.

The option of competitive bidding for coal blocks should be explored and be made project specific like in case for UMPP in power. All the power projects which will be awarded on the basis of competitive bidding must be allocated coal blocks in advance so as to make the project more viable by taking away the fuel risk component. The method of allocating coal quota should be discarded and some portion of coal produced from the captive coal should be set aside for merchant sell through e auctioning. It will attract serious private developers towards developing the coal blocks which otherwise would have taken more tome to develop.

Monitoring process should be made stringent and huge penalty may be levied on non serious developers. Most importantly government should first identify, explore the coal blocks and facilitate in acquiring all approvals in place before awarding any coal block for captive development. This will definitely reduce the time line of coal block development for at least 24 to 30 months.

Though India looks for massive coal import option to mitigate the coal crisis in future, it would be better if it reforms the coal sector and mend certain acts so as to open up the coal sector for a better market discovery. Some amount of captive coal should be allowed for merchant sale so as to attract serious and big players to chip in and discover the huge opportunities lying untapped beneath the ground.

IPL shift: India insecure!!!!!!!!!!!

It is indeed very sad and unfortunate that the IPL will be shifted outside India.What is more troublesome is that the signal it sends to overseas..( India is not safe ). It is clear that IPL organisers can do anything for money at the stake of India's own pride. It is a fact that BCCI is a money vending machine.Had India out of Cricket world, the dooms day would be very near for the other cricketing nations.

It is definitely not a political issue but surely a national one.What could congress do at the time of election. The IPL match schedule clash with the elections. It is the top most priority of the government to provide security to the citizens first and definitely not for an entairtainment private business ( T20 cricket). The states refused to take an extra lliability to arrange for security for IPL matches.India is not having enough security personnels to take guard of these so called VIPs ( cricket players). Government is very right when it expressed its inability to provide security.

But then, BJP is striking the right cord when it says that IPL shifting is not in favour of the nation as it sends a wrong signal to the international community while very shortly we are going to organise the common wealth games. It would be bad for the tourism sector too. But, before pointing figure at the congress to take some mileage on the political front, BJP should point the finger at BCCI and try to pursuade them not to shift base for IPL. IPL can wait for some time but the pride of nation does not.

Now, its high time for we Indians to take a decision. It is we whom the organisers take as granted as they know that cricket is an alternate religion to all of us.So, they play with our emotions.All these hue and cry will not affect the organisers as lots of money is at stake for them and anyhow they will stick to their schedule. Even if the world is not safe, they would better find a option to organise at the moon..ha ha..

So, friends..arise and awake and stop not till the IPL shifting ends. IPL is truly an international domestic event and in no way, it should shift its base from India.

Significance of Holi...the festival of colours

Significance of Holi

In spite of being such a colourful festival, there are various aspects of Holi which makes it so significant for our lives. Though they might not be so apparent but a closer look and a little thought will reveal the significance of Holi in more ways than meets the eyes. Ranging from socio-cultural, religious to biological there is every reason why we must heartily enjoy the festival and cherish the reasons for its celebrations.
So when, its time for Holi, please don't hold yourself back and enjoy the festival to the hilt by participating with full enthusiasm in every small tradition related to the festival.

Mythological Significance
Holi gets us close to our religion and our mythology as it is essentially the celebration of various legends associated with the festival.
Foremost is the legend of Prahlad and Hiranyakshyap. The legend says there once lived a devil and powerful king, Hiranyakshyap who considered himself a god and wanted everybody to worship him. To his great ire, his son, Prahlad began to worship, Lord Vishnu. To get rid of his son, Hiranyakshyap asked his sister, Holika to enter a blazing fire with Prahlad in her lap, as she had a boon to enter fire unscathed. Legend has it that Prahlad was saved for his extreme devotion for the lord while Holika paid a price for her sinister desire. The tradition of burning Holika or the 'Holika dahan' comes mainly from this legend.

Holi also celebrates the legend of Radha and Krishna which describes the extreme delight, Krishna took in applying colour on Radha and other gopis. This prank of Krishna later, became a trend and a part of the Holi festivities.
Mythology also states that Holi is the celebration of death of Ogress Pootana who tried to kill infant, Krishna by feeding poisonous milk to it.
Another legend of Holi which is extremely popular in Southern India is that of Lord Shiva and Kaamadeva. According to the legend, people in south celebrate the sacrifice of Lord of Passion Kaamadeva who risked his life to revoke Lord Shiva from meditation and save the world.

Also, popular is the legend of Ogress Dhundhi who used to trouble children in the kingdom of Raghu and was ultimately chased away by the pranks of the children on the day of Holi. Showing their belief in the legend, children till date play pranks and hurl abuses at the time of Holika Dahan.

Cultural Significance
Celebration of the various legends associated with Holi reassure the people of the power of the truth as the moral of all these legends is the ultimate victory of good over evil. The legend of Hiranyakashyap and Prahlad also points to the fact that extreme devotion to god pays as god always takes his true devotee in his shelter.

All these legends help the people to follow a good conduct in their lives and believe in the virtue of being truthful. This is extremely important in the modern day society when so many people resort to evil practices for small gains and torture one who is honest. Holi helps the people to believe in the virtue of being truthful and honest and also to fight away the evil.

Besides, holi is celebrated at a time of the year when the fields are in full bloom and people are expecting a good harvest. This gives a people a good reason to rejoice, make merry and submerge themselves in the spirit of Holi.

Social Significance
Holi helps to bring the society together and strengthen the secular fabric of our country. For, the festival is celebrated by non-Hindus also as everybody like to be a part of such a colouful and joyous festival.
Also, the tradition of the Holi is that even the enemies turn friends on Holi and forget any feeling of hardship that may be present. Besides, on this day people do not differentiate between the rich and poor and everybody celebrate the festival together with a spirit of bonhomie and brotherhood.
In the evening people visit friends and relatives and exchange gifts, sweets and greetings. This helps in revatalising relationships and strengthening emotional bonds between people.

Biological Significance
It is interesting to note that the festival of Holi is significant for our lives and body in many other ways than providing joy and fun.
We also need to thank our forefathers who started the trend of celebrating Holi at such a scientifically accurate time. And, also for incorporating so much fun in the festival.

As Holi comes at a time of the year when people have a tendency to feel sleepy and lazy. This is natural for the body to experiences some tardiness due to the change from the cold to the heat in the atmosphere. To counteract this tardiness of the body, people sing loudly or even speak loudly. Their movements are brisk and their music is loud. All of this helps to rejuvenate the system of the human body.

Besides, the colours when sprayed on the body have a great impact on it. Biologists believe the liquid dye or Abeer penetrates the body and enters into the pores. It has the effect of strengthening the ions in the body and adds health and beauty to it.

There is yet another scientific reason for celebrating the Holi, this however pertains to the tradition of Holika Dahan. The mutation period of winter and spring, induces the growth of bacteria in the atmosphere as well as in the body. When Holika is burnt, temperature rises to about 145 degrees Fahrenhiet. Following the tradition when people perform Parikrima (circumambulation or going around) around the fire, the heat from the fire kills the bacteria in the body thus, cleansing it.

The way Holi is celebrated in south, the festival also promotes good health. For, the day after the burning of Holika people put ash (Vibhuti) on their forehead and they would mix Chandan (sandalpaste) with the young leaves and flowers of the Mango tree and consume it to promote good health.

Some also believe that play with colours help to promote good health as colours are said to have great impact on our body and our health. Western-Physicians and doctors believe that for a healthy body, colours too have an important place besides the other vital elements. Deficiency of a particular colour in our body causes ailment, which can be cured only after supplementing the body with that particular colour.

People also clean-up their houses on Holi which helps in clearing up the dust and mess in the house and get rid of mosquitoes and others pests. A clean house generally makes the residents feel good and generate positive energies.