Coal Auction : Will It Be A Boon Or A Bane ?

With much fanfare the Ministry of Coal, invited and the Prime Minister enthusiastically put up a good show for which he is pretty well known by now. The on and off-line, physical and digital spaces were well covered, and the key and pet industrialists were invited to participate. One could rationalise saying that it was the Federation of Indian Industries that was partnering the government.

Now let us come to the specifics of the events and its implications. The event was billed as the greatest breakthrough for Atmanirbhar Bharat, a word which originally means self-dependent in Hindi and its use in the recent times has completely distorted the sense of self-dependence leave alone self-reliance. The event was branded as the launch of “commercial” coal mining in India and it looked as if the public sector and the big boys of industry were undertaking coal mining all these years as a charity and for the first time it was being undertaken with a commercial motive!

This current process of so-called commercial mining began with a move to initiate 100 percent FDI in coal mining in September 2019. Now, as a citizen we are not supposed to ask how we can call it Atmanirbhar if the mines are going to be completely owned by foreign companies. However, the fact is this policy of 100 percent FDI preceded the slogan and therefore you are not supposed to raise such issues. So, the event in which every speaker from the Hon PM to the anchor, everyone used this slogan atleast once to emphasise that we will be self-dependent despite the fact that anyone in the world could come and completely own our coal mines.

The next was a move to issue an ordinance, just a month before the Parliament was to convene, to amend the mining law to enable this and mine coal for the market instead for a specified end-use. It is not that this was not allowed. The private sector and the inefficient public sector lead by Coal India Limited and in recent years the Neyveli Lignite Corporation have been pushing for more and more concessions in terms of ease of expansion, over riding of environmental norms, making public pay through their nose to meet the bad loans to the power companies by the banks. A quarter of the quantity of coal from any mine could be sold in the market for over three years now and it has not lead to any reduction in imports or improvement in the economy. So, this big drama was perhaps intended to transparently do the match fixing where companies and the government in front of the entire country are talking – the government to give and cronies to take – the public resource. Needless to say, that all this is ostensibly to be transparently auctioned as directed by the Supreme Court in the 2-G and Coal Block Allocation cases.

Why do I call it open match fixing?

The launch function was open to anyone who registers on the website. The website also cleverly had a question box where you were free to ask your questions. This would enable everyone who is an ardent supporter to say that one could even question as the PM was talking. However, the twist was that these questions were perhaps to probe who is asking the question and to monitor rather than to provide any answer. This art of being “transparently-opaque”, is an evolved art from the notorious statement of the current PM of erstwhile Prime Minister bathing with a raincoat. This is bathing in the heavy downpour of Mumbai rains without getting wet!

None of the questions atleast from people I know and I myself raised were unanswered. Some of the questions were very simple – whether the government thinks it is important to adequately inform the people on whose land these 41 coal blocks being put under the hammer, could people own the mine and the government enable them manage much in the nature of Farmer Producer Companies, there was not even a statement by any of the speakers from the government or the partners in this match fixing. While this time the process is led was the Hon PM and the drama was created it is actually the 11th tranche of a series of unsuccessful auctions and each time mending rules and regulations to suit the suitors.

Several groups including sarpanches from some of the prospective villages had written to the government and various civil society groups and rights groups had expressed the need to revisit this entire process have fallen into deaf ears. Even responses to the discussion paper presented January, feedback on the legislation all have been transparently ignored just as any of the peoples’ concern. People are actually sick and tired of hearing that all this is being done for the poor and the new twist is given to them as being “aspirational”.

What if anything is new?

The bidding rules and the entry barriers have been eased. There is no threshold of experience or of investments. Once you succeed in your bid, you can mortgage your coal. It is worth pointing out that in the earlier tranches of auction the CAG had noticed peculiarities which suggested of bid-rigging. This time it is becoming evident as the rule allows for just two players to bid for a mine. One would recall how the sale of BALCO there were just two-bidders one quoting exactly half of the other!

The Ministry has also been talking of “embedded” clearances. This means that that implicitly all the clearances will be provided by the respective arms of the government. This is actually not called for since our Minsters themselves are sitting over the appraisal bodies and remotely sanctioning the mining in national parks and sanctuaries, over densely populated areas and fifth schedule areas where mandatory consent from the gram sabha is essential. If that is not enough the Project Management Group of the PMO can intervene. All this is was not attractive enough that the Chief of Vedanta wanted that except the public hearing, which can always be rigged, the rest must completely be based on self-certification because of the “difficulties” in obtaining clearances. The Chairman of Tatas wanted a coal exchange so that the speculation on prices could be there and with his background in managing more of software companies and revenues his wish will also be perhaps soon granted.

The singular silence of the lack of demand, over 40 Giga watts of stranded power assets still bleeding the banks and solar energy becoming cheaper than coal were all immaterial in this new “historic” launch of commercial coal mining. This was new as any sensible person, no matter from which sector would clearly question the need for expansion of coal, how to seriously revisit the investments or junk them to look for distributed renewables. One does not know if the Government is trying to fool itself or hoodwink the world when it says coal-gasification is environmentally sound and climate friendly! What was new is that despite the pandemic clearly showing that these kind of industrialisation and growth is not sustainable and so vulnerable even to a single lock-down of a quarter, the knowledgeable decision makers want to make bigger and bigger mistakes of the same kind. This is very clearly putting good money behind the bad and will need to be backed by a “bad-bank” too.
Resource Curse with a Bang
Lot of literature exists on the resource curse and lots of communities are victims of the same as concede by even the Hon Prime Minster in his speech. However, to just brush it aside with brave words, not recognising even the District Mineral Foundation funds have failed to reach the affected and poor is sheer dishonesty with the people who are going to be the victims. Billions of tonnes of coal are going to be handed over to the corporates at throw away prices. Some of the blocks on the axe are places were in the past too companies have come to acquire their land and displace. They have resisted and have been witness to the high handedness of the state. For example, the Machakata block the state and the company even colluded to have the public hearing on a day when all women in area would be on the annual fast. Now that this has the branding and support of the highest authority, the minions will rough ride until we reach the bottom of the pit.
Will this bring enough money?
The figures vary but the government is sating that nearly Rs 50,000 crores will come in over the next four to five years. Is that good enough? Consider this, a recent reply in the Parliament the government stated that every year the Coal India makes losses to the tune of twelve thousand crores from close to 251 mines. Just shutting them down will save us this kind of money. Given the kind of debt-equity ratios being allowed we can expect few more Niravs and Mallayas in the making.
Reversing GazhniMuhamed
History has it that Gazhni Muhammed raided Indian Sub-continent seventeen times to loot India and as patriotic Indians we hear heroic stories of how he was vanquished each time. We got colonised by stealth and force and it required rare individuals like Gandhi and Subash Bose to redeem us. Today while the brand is “Atmanirbhar”, it is for the 11th time the Government of our Independent country is inviting global corporates to colonise! One of our contemporary anthropologist Dr Shalini Randeria, characterises the Indian State as a cunning state, but this is proving to be more than that “a selling state”!

One wonders what would have been the nature of this event, if the Akhil Bharitya Adivasi Mahasabha or an Association of People Affected by Mining who have not been properly rehabilitated after being displaced by the 600-plus coal mines or the self-effacing Swadeshi Jagran Manch were to partner with the government. But not in this case because despite communities and organisations writing to the Government about the gross injustice of auctioning the land without even giving the people a sense of what holds for them in future who are currently living and eking out atleast a subsistence livelihood, this Government does not care. Perhaps the PM cares!