A crisis that was avoidable

If Coal India is to be believed, there is no major threat of coal crisis at least for the present. The situation has improved in last one week and there are enough stocks to meet the demand in case a crisis-like situation arises. But then why was the panic button pressed? There are many reasons for this.

Following the end of second wave of Corona, the economic activity has increased, and this has resulted in surge in demand for power. This sudden surge and failure of governments to store enough stocks ahead of monsoon resulted in a supply deficit due to a coal shortage. This had forced northern States to cut power this month. In many States including Andhra Pradesh, there have been unofficial power cuts in the name of maintenance for two to six hours a day. Increase in power demand and high global coal prices have left utilities scrambling for it is the main source of power generation.

This year the country witnessed more and prolonged rainy season. During this period evaporating and producing coal becomes difficult and hence all States were given an advisory well in advance that they should pile up stocks to meet the demand during these months.

But many States did not follow the advisory and it resulted in shortage of coal in August and September. Why did they not go in for piling up stocks? Well, the main reason is that they had to clear the dues to Coal India and with most of the revenues diverted for freebies and other popular schemes, the financial position of most States including the two Telugu States apparently did not permit them to invest in the stockpiling of coal.

Another reason could be the heavy dues they had to pay to Coal India. According to CI, their receipt rolls were at Rs 7,000 crore to Rs 23,000 crore at one time. Still, to avoid a major crisis which could have cascading effect on almost every sector, they did not stop the supply and when the crisis came, the dispatches were ramped up. CI further claimed that as against demand of about 18 lakh tonnes of coal per day, they are now able to supply 20 lakh tonnes and in the coming days the demand would fall as there would be reduction in temperature. Moreover, with rains receding drying of coal would also become easy.

The most unfortunate aspect is that still the State governments don't seem to have learnt much of a lesson. All through they have been claiming that there is no crisis and at the same instructed officials to buy coal and power wherever available. This was more for pubic consumption since everyone knows that it is not so easy to buy coal and it is not a product that can be made available overnight.

If money was not a problem to buy coal why did they not buy and stock required quantities of coal ahead of monsoon? It's time the governments realised that people are not fools nor are they blind to what is happening. The political parties would be doing great help to themselves if they learn to be more transparent and honest in their acts and garner the courage to call a spade a spade.