Even as Coal India Ltd (CIL) cut production of coal in April, Coal Secretary Anil Swarup tells Bloomberg TV India that tempering of demand is a temporary phenomenon and an uptake in coal demand will be seen in the next 4-5 months as Ujwal Discom Assurance Yojana (UDAY) kicks in.
Tell us about how you managed to turn around the Coal Ministry.
Indeed, it was tough when I took over as the Coal Secretary. But it has been a wonderful journey. It is because I am blessed with an outstanding team, a very committed set of officers and an amazing team at Coal India where the present Chairman is putting his heart and soul into turning it around. I think what really made the difference was the trust that was bestowed on us by the government. Initially, the coal block auctions and thereafter the fundamental problem we had in this country with regard to coal shortages. I think coal shortage is an event of the past now, that is what gives us a bit of comfort. We discovered that most of the problems were in the States. Periodically, we used to take our team to these States and sit with the Chief Secretaries and the senior officers of the State government. Secondly, what we did was, we could manage to convey value proposition of stakeholders, primarily the State governments, conveying to them that if coal mining did happen smoothly then the benefits would go to the State governments and the State’s citizens. This went down very well with them and consequently most of the problems were solved.
Demand has already picked up. During April, it was over 10 per cent as compared with the last year. We are hopeful that the demand will continue to pick up. The inventory that we had at the end of March 2016 has already come down. It will continue to come down because we believe that as UDAY kicks in and more States would come on board, there will be greater demand for power and consequently more demand for coal. For us the so-called surplus coal is a very temporary phenomenon. There is an inerrant demand for power.
UDAY is really in the middle of unfolding and many States have signed the MOUs. Can you give us a bit of the timeline on when do you see this really kicking in and also in terms of Plant Load Factor, how much do you think this is going to make a difference?
I would say in the next 5-6 months the demand will pick up, and UDAY will start rolling in. And as other factors also come in, I think the demand will pick up in 4-5 months and this is already evident in at least some of the States where they are coming up with new Power Purchase Agreements. I am very optimistic that once that happens, the demand for power as well as coal will go up.