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Home News Power Sector News Power, green Ministries at loggerheads over NIB

Power, green Ministries at loggerheads over NIB

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MiningThe proposed super regulator in the form of National Investment Board (NIB) may have faced opposition from the Environment Ministry, which feels that the body would seriously undermine its role as a key department which gives the all important green clearance to big infrastructure projects, however, the Power Ministry — whose several projects in the recent past have borne the brunt of delayed sanctions — has supported the proposal.

 In its response to the Finance Ministry (seeking comments from various line Ministries on the setting up of the NIB), the Power Ministry has said that it is a welcome move, which will help in timely clearances of mega infrastructure projects.

In fact, apart from fully supporting the move, the Power Ministry has suggested to the Finance Ministry that the Secretariat of the proposed NIB should be located in the PMO, and at the same time has suggested that it should be an effective body which should ensure clearance of all major infrastructure projects within a specific time frame which in turn would facilitate their timely completion and at the same time the target for capital expenditure are also achieved.

Since the last 12 months, several power projects - especially those fuelled by thermal coal - have seen major hurdles as delays in environmental clearances to coal blocks situated in densely forested areas (which were till recently notified as No-Go areas), led to an acute shortage of coal for thermal plants.

In fact, till six months back there were around 25-odd thermal plants which were left with just a week's supply of dry fuel, a situation which forced major power players to meet Prime Minister Manmohan Singh in February, seeking his intervention to improve the situation.

Subsequently Coal India Ltd (CIL) through a Presidential Reference in April was asked to urgently expedite inking of fuel supply agreements (FSAs) with power companies to ensure coal supply at 80 per cent trigger level.

Official sources say that the setting up of the proposed NIB (which would be headed by the PM) would be of great relief in the current scenario when despite PMO's intervention, the FSAs are yet to be inked as differences prevail between Coal and Power Ministries as to who would bear the additional cost of blending imported coal with that of domestic coal.

According to terms of references of the NIB , it will facilitate and ensure accelerated and time-bound grant of various licenses, permissions and approvals as a mechanism to be triggered in case of the failure of the competent authorities (read concerned ministries) to act in time to take decisions.

Sources close to the development said that the Power Ministry's prompt response to the Finance Ministry, giving its enthusiastic support to the setting up of the NIB, also stems from the fact that with the PMO regularly keeping a close tab on the issue of signing of FSAs, the setting up of the super arbitrator would remove all the roadblocks it is currently facing.

On other hand though the Coal Ministry is in the process of sending its formal response to the setting up of the NIB, Shastri Bhavan sources indicate that it is a good move which would also help in putting on fast track the clearances currently being sought for all the coal blocks which had been red flagged by the Environment Ministry for being situated in No-Go areas.

With the PMO already having asked both Central Electricity Authority (CEA) as well as CIL to urgently work out a formula for price pooling (on blending of imported coal with domestic coal) so that the FSAs can be signed by November-end, the setting up of the NIB would only serve the common cause of both the ministries.

Source- Pioneer


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