The Union Coal Secretary, Mr Alok Perti, on Saturday blamed the “intricate” government policies for Coal India's (CIL) failure in acquiring assets abroad and ensuring energy security of the country.
In an unusual self-criticism, Mr Perti reminded that unless the rules are suitably changed, the public sector major stands little chance in acquiring assets in a competitive global market.
The coal major, having a cash reserve of nearly Rs 51,000 crore ($11 billion), is so far credited with the lone success in acquiring two exploratory blocks in Mozambique.
According to him, the “time consumed (by the government in evaluating a definite acquisition plan of the company) is too high” to strike deals. “The private sector has done relatively well in acquiring assets abroad as it has the advantage of overriding such procedures,” he added.
“I think, it is incumbent on the government that the risk factor is reduced, otherwise this (acquisition plan) is not going to move,” the Coal Secretary said addressing a seminar on energy security organised by the Mining, Geological and Metallurgical Institute of India here.
Mr Perti's observations were similar to the views expressed by CIL top leadership for quite some time now. In a letter, in June, the CIL Chairman, Mr N.C. Jha, requested the Centre to relax the viability benchmark of 12 per cent internal rate of return (IRR) to go ahead with any future acquisition opportunity.
The coal major felt that the IRR benchmark was “too steep to substantiate any foreign acquisition”.
“We are awaiting a few clarifications from the government to go ahead on offers to acquire interests abroad,” Mr Jha told newspersons on the sidelines of the company's AGM on September 20.
No resolve
Responding to queries if the government was considering amending its procedures to add teeth to CIL initiative, Mr Perti said discussions were on for nearly one-and-a half years on creation of a sovereign fund to acquire energy assets abroad.
Clean energy Fund
The Coal Secretary was also critical of the Centre's lack of initiative on using the much hyped clean energy fund, created by collecting a cess of Rs 50/tonne of coal sales (domestic as well as imported) in the country.
“The fund is created for sometime now but unfortunately the money is not utilised,” he said.