Aiming to bridge the gap between the demand and supply of coal to power stations, the Coal Ministry is in the process of adopting a concept where it would outsource mining operations of fields owned by Coal India ltd (CIl) to private entities under the mine-develop-operate (MDO) model, who through their modern technologies would expedite evacuation of the dry fuel.
Government, according to sources close to the development, is keen that the MDO concept is accepted by all the eight subsidiaries of CIl, so that it can be implemented by the end of this year. In fact the ministry is considering declaring Mahanadi Coal Fields’ (MCl, one of the subsidiaries of CIl) Siarmal Opencast Project as a pilot project for the proposed MDO model.
Sources told The Pioneer that the MDO model has been under discussion within the Coal Ministry since quite some time and in the light of the events of the last one year - where repeated tussles between CIl and National Thermal Power Corporation (NTPC) over poor supply of dry fuel for power plants forced the Prime Minister’s Office to prevent the situation getting escalated - it is keen to adopt it as soon as possible.
Under the MDO model, which is on the lines of public private partnership (PPP) concept, private companies having modern coal evacuation technology would be developing coal reserves on behalf of Coal India ltd (CIl) for a specific period of time.
Sources said that CIl does not have the required technology for faster evacuation of coal from its fields and therefore outsourcing its mines to private operators would not only expedite development of mines, but also put on fast track the supply of dry fuel to power plants.
The outsourcing of mines to private operators would entail higher costs to the Coal Ministry, and therefore for this a revenue-sharing model which provides a win-win situation for both the Government as well as the operator is currently under consideration within the ministry.
Official sources pointed out that the Coal Ministry is keen to ensure that there are no loopholes in this concept, as in the private operator does not skim away the entire revenue (as has been alleged by the Government in the case revenues which accrued from the development of KG-D6 fields), so it is taking the necessary precautions while preparing the revenue sharing model.
Though the MDO concept has been under the Government’s radar since 2012, owing to reluctance on part of CIl’s subsidiaries in accepting it, has delayed its implementation.
Coal Minister Sriprakash Jaiswal wants it to be implemented by the end of this year and is learnt to have conveyed his keenness to his officials.
He is of the view, sources said, that all the subsidiaries should be on board for adopting the model, as this is the only way to increase coal production. Thus the Coal Secretary has been reviewing the progress of the MDO model on a regular basis and briefing the minister from time to time.
Even the Minister of State for Coal Pratik Prakashbapu Patil has been entrusted with the task of bringing all the subsidiaries on board for accepting the MDO model, sources added.