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Not against coal deallocation, we only want finality: Goyal

As the date for the Supreme Court’s decision in the coal allocation case draws near , power minister Piyush Goyal says they will not interfere with court’s decision, but makes it clear that they are not making a case for exemption for any player

On e-auction, he says that the government is very clear that one company’s profits can’t be more important than the greater good and a cut in Coal India ‘s e-auction volumes is almost a done deal.

Below is the verbatim transcript of Piyush Goyal’s interview with CNBC-TV18’s Shereen Bhan. For the complete interview watch the accompanying videos

Q: The many achievements that you have listed in your report card. The achievements during the first 100 days and you also spoke about how this has been a trail by fire for you, your initiation into these ministries has been trial by fire but would you say that your real test will start on September 9 when the Supreme Court passes its verdict on what it intends to do as far as coal block allocation is concerned?

A: Why I am on test every single day and September 9 will be one more day in that stream of days. I am in fact very much hoping that September 9 will show some finality to this long pending dispute. I do hope on September 9 the decision is final and I am able to move forward so that I can find solutions to this big problem of increasing the coal production and reduce our dependency on imports and increasing the generation of power. So, I am in fact eagerly looking forward to this date.

Q: I don’t expect you to pre judge what the Supreme Court is going to say but I want to quote from your own booklet where you say that the government is ready with a plan to expeditiously and transparent the auction block subject to the outcome of the Supreme Court’s judgement. What are the scenarios that you are working with the worst case scenario I would imagine Supreme Court saying that all 218 blocks have to go? What is the best case scenario that the government is hoping for?

A: I have no worst case or best case whether they deallocate all 218 or any number of them. For me, I am agnostic to the decision.

Q: Can you really be agnostic given the fact that this is going to disrupt the economy?

A: I can assure you nothing will get disrupted. We value and respect the judgement of the honourable Supreme Court. I am sure the Supreme Court is seized of all the ground realities, they asked us to present information about the blocks which are already producing or which are ready to produce, which we shall furnish to the court.

As far as the Government of India is concerned, we certainly do not want to suggest any particular course of action. Once the Supreme Court makes up its mind, what it wants to do. We will expeditiously get into the act of taking the process forward in a transparent and honest manner to discover the price given to people who deserve it, who are most competitive in their proposals and in that process I am confident, if at all there is a disruption we will keep it to the bear minimum. In any case these coal blocks produced barely 37 million tonne last year and maybe 50-52 million in the current year. So, there will be a certain short-term disruption but in the medium to long-term we will be able to open up many more mines much faster. However, for the last many months now we have not been able to give mining leases, we have not been able to open many new mines which are ready to produce. I think all of that can get expedited.

Q: How quickly will you be able to undertake auctions if indeed the court cancels 218 or exempts the 46 that you are hoping that the court will exempt?

A: I would like to correct you that I am not hoping they would exempt any particular blocks – that has not been the case of the government either in the hearing on the 1st or in the hearing on the 9th, we are not hoping for any particular dispensation for a set of people. We are only looking for finality of the process.

Q: Is the government not keen that the 46; 40 which are already operational and six which will be commissioned by March next year, these should be exempt?

A: The government is not interfering in the process of the court – that is for the court to judge and decide. The government has only appealed that whatever decision the court takes should be final and should not be left to any further committees that is the appeal that we have made.

Q: Is that the worst case scenario that they will setup a judges committee to overview and overlook the situation?

A: I would not like to comment on that, but the important thing is that we have finality in the decision and with that finality we move forward. As far as the 40 and 6 blocks are concerned, the information for by the court is been provided for appropriate decision at the end of the Supreme Court.

Q: How soon depending on what the court decides to do can we expect coal block auctions and what is going to be the principal driving the coal block auctions; are you going to go the 2G and the 3G way where revenue maximization became the guiding force for the government?

A: There are two issues in these – as far as the time concerned to auction, I am exploring various possibilities while there maybe some mines which maybe ready to produce, already producing, we do not know, there are various scenarios, so it is very difficult to put a time limit to it but on a broader perspective my driving force or the driving principle is that the time to mine should be the fastest. There maybe certain mines where I would rather explore the mines do the environment clearance mining plan approval and then auction it, similar to the ultra mega power projects (UMPP)model.

Q: The preference will be the explored mines should go first on the block?

A: Should go out in the market first so we can start getting production out of that also whichever are not explored or not ready to mine, I am looking at the option of doing that process so that I get better value and I am able to get production out of those mines faster. I believe in the organic way of working that the Government of India today is working seamlessly without departmental hurdles, I think we can get all those approvals much faster than a private entrepreneur can.

Having said that in terms of revenue maximization, I think different sectors will have different viewpoint, for example there are certain regulated sectors like power and fertilisers, where coal is only a pass-through, where the cost of coal will be pass-through and the end customer has to pay for it. In those sectors revenue maximization will not be the criteria but within constraint whoever gives us the best value and was the ability to mine will have to be the criteria for the non-regulated sectors. We could look at trying to maximize the revenue.

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