While state-owned Coal India Ltd has fallen back on its production targets, the private sector too has not made much headway in the coal mining sector.
According to Power Ministry estimates, of the 98 blocks that had been handed over to private sector players, production has commenced only in 13 blocks. As a result, the expected production by March-end 2012 is likely to be just around 20 million tonnes against the projected 100 million tonnes.
One of the main reasons for the dismal trend is that non-serious players have cornered a majority of the captive blocks on offer and have no plans to adhere to the project development milestones.
To send a warning signal, the Coal Ministry had, in May and June this year, announced the de-allocation of around 16 blocks handed over to private sector players and state-owned firms such as NTPC Ltd. Late last year too, the Ministry had issued notices to firms owning 84 coal and four lignite blocks for not having developed the projects within stipulated the time.
The delay in development of domestic resources has left the country with no option but to import to tide over the supply shortages. In five years, it is estimated that India could be forced to import almost 30 per cent of the coal required to meet its electricity needs.
This would mean that consumers across the country could find electricity prices shooting up.
Or else, distribution utilities would be pushed closer to bankruptcy on account of the increased strain on their finances from costly coal imports.
Back of the envelope calculations show that against a projected requirement of 742 million tonnes of thermal coal for fuelling coal-fired stations by the end of the Twelfth Plan (2012-17), only 527 million tonnes of domestic coal is likely to be available even in the best case scenario. This translates into a shortfall of 215 million tonnes or 29 per cent of the country's total requirement projected by 2017.