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Power Minister tells Rediff: '24/7 power in every home by 2019'

Last updated on: April 20, 2015 18:37 IST

Coal-fired power plant

 

'This country has become cynical, the country has lost hope. Prime Minister Narendra Modi is getting back hope in this country.'

'We are deconstructing the past which had corruption, inefficiency, policy paralysis, a tottering economy where investors had lost confidence, and people had become cynical. We are changing that, we are bringing confidence back to the people of India.'

Union Coal Minister Piyush Goyal's candid interview with Sheela Bhatt/Rediff.com

This is such a complex thing that even you seem to be contradicting yourself. You said the United Progressive Alliance gave coal mines free of charge to these end-users. And you are also doing a slightly similar thing; your coal secretary said that coal has now turned into a diamond. And then you are selling this diamond cheap through reverse bidding... Isn't that contradiction?

In the non-regulated sector, coal is being given to the highest bidder. They will pay the highest price because there they can make the highest profits.

But that same diamond (coal) is going to give power to a poor household when it is going to give power to somebody after 67 years.

My father studied under a street light in a small town in Haryana. I do not want the next generation to study under street lights anymore.

I want this country to have sufficient, affordable, power in every home and when that coal serves the poor man, when it gives 24/7 power to every village, every home in this country, I think I have realised the maximum value for that diamond.

I will make sure that that diamond goes through a honest transparent process where the value of that diamond is passed on to the poor man and not to the pockets of politicians in Delhi who decide whom to give that free of charge.

I remember you telling some journalists including me that 'Look today we have crossed that famous mythical 176,000 crore.'

No. 186,000 crore!

In the 2G scam...

The 2G was 176,000... Wo sarkar chhote scam nahi karti thi (that government didn't do small scams) Their scams have to have a big magnitude.

But let me tell you that your expressions were a bit clouded from our point of view when this entire problem with the e-auction policy came up in the form of cartelisation. If you were so sure of your policy, how come this anomaly and weakness has remained in-built in your entire e-auction policy where your government itself is saying privately that cartelisation took place...

It is very interesting that you should ask me that. By the way, when there is a law of the land, which says that if you commit a murder, you will be hanged. Does it mean that because there was a murder committed, the law is wrong?

Don't you think it is a serious issue?

Yes, it is a serious issue. But we don't know whether there is cartelisation or not.

But you have cancelled coal blocks.

Not for cartelisation.

Then?

We have cancelled it because... If you have read the verdict...

You wanted the cheapest bidder...

Not at all...

Then what is your problem?

Try to understand... It is not a question of the cheapest or the highest bidder. When you look at a chart, and you see that there were six bids, if one bid is at this point (lower) and five bids are here (higher) and if I ignore this reality and the mitigating circumstances around it, then after 10 years I would have the courts hauling me up saying, 'Mr minister from your position you could not see such evident disparity in prices?'

Outlier (the word used by Goyal after allegations of cartelisation (external link) came up) has a different connotation. And cartelisation needs investigation.

To be able to allege whether there is cartelisation or not, there can be an investigation which can decide whether there is cartelisation or not.

Sitting in my office I only have the records before me, and when the department put up facts before me then as a minister it is my duty as minister to keep my eyes open and to keep my mind working and to ensure fair play if something doesn't look like a fair value compared to others.

Now take a simple example, see there are four bids that went in the Gare Palma coal mine in the non-regulated sector. Right? That is why I asked if you are interested in just one bid or in the overall system...

The overall system...

If you are interested in one, then we can discuss just that, otherwise I can talk on all three coal blocks that we have cancelled. So if we talk of the whole system, then there are four mines in the non-regulated sector in Gare Palma.

There is a bit of a difference in grade, but the difference in the Coal India price is Rs 400. In that particular one mine the bid was Rs 3,502 per ton. The other mine is Rs 3,001 per ton. Another one is Rs 2,600 per ton and another Rs 1,585 per ton. We got starting from Rs 3,502 to Rs 1,585. This is what outlier is that there is a certain trend.

I am not micromanaging these 200 plus bids, it is an open auction. If somebody decided to give more or less, it is fine. But if I would have not taken action, today your question would have been that 'Mr Goyal, you must be a blind man. If you can't see Rs 1,585 against the range of Rs 2,600 and Rs 3,500, even if you can factor that this was probably a lower grade, it can make a difference of Rs 400, Rs 500.'

That is what the job of a conscious responsive government is: To make sure that wherever things do not look clear and proper, one has to act. And that is what precisely I have done.

You are claiming that you unlocked Rs 4 lakh crore from 67 blocks of coal mines...

67 coal mines includes allotments to various states, to Coal India, to public sector units, all of that.

The auction was only of 34 mines, four mines got cancelled, so technically 30 mines got auctioned, so far. I think 20 for the non-regulated sector, which gave us Rs 1.65 lakh crore and nine have been won by the non-regulated sector, which gave a benefit of some Rs 69,000 crore, which will be passed onto the people of India.

That was the auction and the rest of the money came from the allotment of coal mines where they pay 100 or 150 rupees per ton. It is all government to government which will be for end-users and the benefit will be passed onto the consumers.

Are you absolutely confident in saying that the auction of coal mines by the producers of the power sector will be passed on to the consumers?

Absolutely. Unless I had confidence that I have done an honest and fair job, sitting in the coal ministry itself would have become difficult. With the kind of background... you imagine the situation, years of problems, inefficiency, the CBI (Central Bureau of Investigation

Against that backdrop, if my officials and I can sleep peacefully at night, can enjoy working, feel satisfied that we have done public service honestly so that the eastern states can also benefit, and 125 crore Indians will get cheaper power, I think it is only possible because I am confident that I have done a fair, honest and transparent auction.

This sounds very unrealistic and incredible.

That is because you are used to... this country has become cynical, the country has lost hope. And Prime Minister Narendra Modi is getting back hope in this country. If you will recollect the movie Saaransh. Do you recollect Anupam Kher? How for three hours he was so troubled. In the end he met that honest man to whom Kher says that I have lost hope. What did that honest man say to his teacher? He said, 'Sir, you cannot say that, you are the one who taught me hope, you taught me how to be an honest man.'

After 67 years Prime Minister Modi has come to be that honest man who will bring back the integrity in the system and remove this cynicism that sadly everyone has that nothing can be done honestly.

There are two scenarios which experts are talking about. Piyushji, you might not be the power minister at that time, but we will be journalists even then. Some experts say, one, that once things get rolling and power producers get physical possession of the mines, by that time the reforms in the power sector will be such that the market, the international market...

Did you talk to some astrologer or something... We have made regulations for the future that the regulator will ensure that this benefit is passed onto the consumers.

I trust the regulatory mechanism, it is a fair and independent mechanism and the politicians and government do not interfere with the regulators.

If the gentleman who has so-called educated you, the so-called expert doesn't trust the regulators, I think then he might have to go and ask the regulators that question...

The power generators may say we are not able to afford, they will just come and say that the coal price is fluctuating too much.

Maybe the gentleman hasn't read the auction document. I urge you to read the auction document; it is very transparent and clear. You should have a debate on this, call all the naysayers, all the critics and have a debate.

One of the ministers of the Modi government -- I do not have a proof -- has written to you and pointed out this issue of pricing at the e-auction. See in the last 30 years, the coal price was different: In 1985, in 2000, 2010 etc. But for the coming 30 years you have taken only one base price.

First of all, I have not received any such letter. So either your sources look weak or I think that the effort the PM is making to ensure that things do not go out and the control we are trying to bring in is effective... because nowadays we do not get such letters, so you have to fabricate letters...

Okay, I take it that you did not receive a letter from a fellow minister, but tell me the price should have been a phase-wise...

The person who has educated you has not read the auction document. We have kept a provision for an escalation based on a formula. (A Wholesale Price Index-based formula that has already been provided, keeping in mind the increasing cost of coal mining).

Any government policy is an evolving thing because with experience you learn. You are also a first timer in this ministry. What have you learnt? What kind of tuning is needed for the coal sector policy?

Well, there are few lessons which we are going to use to improve in the next round. One learning is that I never thought people will misuse the ability to bid for all their requirements and we found there was more than one bidder, from one group of companies in a mine. So they were able to have two or three bids from sister companies or from within the group.

In future auctions we are going to allow only one bid from a group in a mine. And if they bid 2 or 3, we will ignore all of them and take only one in the second round after the initial bids. So that is one lesson we learnt.

But fortunately, in the initial bit, I had one clause that said unless there are these many bidders, we won't allow the auction to proceed and in fact some mines were taken off the auction because there were not enough bidders.

So fortunately that minimum bid criteria protected us from damage.

But in the future we will improve upon it. I am a person always with an open mind. I always learn from whatever I do and it might not be a mistake, but there is always scope for improvement.

Another learning is that while I don't have conclusive evidence of any mischief is that we can do something to further ensure that nobody can do mischief. So the next time I am not going to announce who the technical bidders are in advance. I will have all the people who have bid in one hall without their mobile phones or computers, sitting at our terminals.

At the terminals they will come to know if they are eligible bidders or not, at that terminal they will come to know the top 50 per cent category and if they are eligible to bid in the second round and they will have to continue bidding there and then, without knowing who their competition is, so that there are no bilateral or trilateral meetings.

In the bigger picture of the Modi government and the idea of infrastructural development, how does this availability of coal in the near future now fit into hopefully two, three years down the line...

This country has the ability to meet its entire coal requirement. I expect Coal India to do 1 billion tons of trade after five years. I expect the overall coal production to cross 400, 500 billion tons. I think two, three years down the road, thermal coal imports can stop.

Coking coal is still in shortage in the country. But I am fairly confident that thermal coal imports can stop, except, maybe for the coastal plants who may find it viable to import.

My question was how does this entire exercise fit into the bigger Modi dream?

Well, Prime Minister Modi wants to see an empowered India, where every Indian has a good home, 24/7 power, has road access, children go to good schools, jobs and working opportunities.

Is it possible before 2019? I am talking of one item: 24/7 power in Indian houses?

24/7 power is going to happen, it is not a question of possible or impossible. There is nothing impossible in this world, madam. You need honesty, you need vision, and sincerity of purpose and Prime Minister Modi has all of this.

Power by 2019?

Prime Minister Modi will give power to every home in this country by 2019.

2019?

Yes! 2-0-1-9 (speaks emphatically) Do hazaar unnees. I will say it in Gujarati also.

Do you think that this e-auction, money and all that signifies that short-term and long-term investment is coming to India?

I am very confident. Prime Minister Modi's government is on the right track, his focus is on structural improvements in the first stage.

When you are building a home, it might take you a few years and while you are making the foundation, you dig a hole, build the foundation. If the woman of the house has to go while the home was being constructed, she would see dirt, she would see cement, steel, bricks, sand, she wouldn't like all that.

But it is the effort of those few years from the foundation to making the home and finishing it. It is only at the end of it that the woman opens the door and walks into a beautiful paradise which she calls her home and enjoys her home.

Today this government is working to make that beautiful home, we are making a strong foundation, we are deconstructing the past which had corruption, inefficiency, policy paralysis, a tottering economy where investors had lost confidence, and people had become cynical.

We are changing that, we are bringing confidence back to the people of India. We are reviving national and international investors' enthusiasm to invest in India.

We are bringing in honesty. We are rooting out corruption, we are working on creating infrastructure, we are working to create 60 million homes, so that everybody in India can have a home, they can have power in their homes, so they can have education, health, a toilet in their home.

That is the India Prime Minister Modi has committed to give to the people by 2022 when we celebrate 75 years of Independence. But power will still happen by 2019.

Sheela Bhatt / Rediff.com
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