Govt Can't Reduce Goa’s Coal Imports

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Coal imports will increase, not decrease. They are slated to nearly quadruple from 12.75 million tonnes to a staggering 51.6 million tonnes each year by 2035, as per the Shipping Ministry’s 2016 Sagarmala project report

JSW Steel imported 10.11 million tonnes in 2016-2017, against an allowed capacity of 5.48 million tonnes

On Sunday 15 November, Chief Minister Pramod Sawant told a group of children who urged him to stop coal imports because of pollution, that the Goa government plans to reduce coal handling at the Mormugao Port Trust (MPT) by 50 per cent. “I assure you coal import and handling will drop by 50 per cent,” Mr Sawant told them. He said that coal import cannot be stopped altogether, as industries in Goa and outside have been running on it for 40 years.

The chief minister pointed out that 2,000 people work at the port, and they also have small children. “We have to give them other employment first and then stop coal. Once the other work starts, we will reduce coal and completely shut it down. Give us some time,” Mr Sawant said.

Regrettably, quite contrary to what Mr Sawant told the children, coal imports are likely to increase, not decrease. Around 35,000 tonnes of coal is already transported each day by goods trains from the Mormugao port. By 2035, coal imports are slated to nearly quadruple to a staggering 51.6 million tonnes each year. The Shipping Ministry has identified 17 thermal power plants and 22 steel plants in Karnataka and Maharashtra as “potential clients” for the Mormugao Port in its 2016 Sagarmala project report.

In 2016-17, 12.75 million tonnes of coal was unloaded at the port by JSW Steel, the Adani Group and Vedanta. JSW Steel has been grossly exceeding its import capacity since 2012. It imported 10.11 million tonnes in 2016-2017, against an allowed capacity of 5.48 million tonnes.

According to an article written in 2017 by Smita Nair, the reason for this was plain and simple economics. For example, the transport cost for each tonne of coal from Mormugao to Koppal in Karnataka (where the Adani Group supplied coal to 28 factories) worked out to Rs850 for the 308-km journey. The comparative cost was Rs1,500 from the Mangalore Port and Rs1,200 from the Krishnapatnam port in Andhra Pradesh.

The main problem is the Mormugao Port Trust (MPT). Earlier, it earned revenues on iron ore exports. MPT exported 43 million tonnes of iron ore in 2010-2011. This dropped to less than 10 million tonnes in 2018-19. With the collapse of mining in Goa and the utter inability of the state government to restart it despite regular assurances, the MPT has little other business apart from coal imports.

Iron ore mining had obvious problems, but at very least it contributed handsomely to Goa’s economy. During the heyday of iron-ore exports, mining contributed over a third of the state’s GDP. It gave business to truck owners, barge owners, machinery suppliers, etc, as well as employment to thousands of people.

Coal imports, on the other hand, only keep the port alive. They do little or nothing for Goa’s economy. To make matters worse, coal dust pollution is a major health hazard in the port city of Vasco, as well as in the villages along the railway track to Karnataka.

Mr Sawant says his plan for Mormugao Port to reduce coal imports is that it would diversify into pharma export and the tourism sector. But how realistic is this plan? 

Around 35 top pharma companies have production facilities in Goa. The state has around 75 pharmaceutical manufacturing units and accounts for as much as 11 per cent of India’s pharma exports.

It is true that the pharma industry would prefer to export directly from Goa rather than transport their goods by road to the JNPT Port in Navi Mumbai, as they do at present. In fact, in July 2017, the Confederation of Indian Industry (CII) held a conference on logistics for this very purpose.

Industry bodies have been urging the state government to implement a progressive logistics policy and create suitable infrastructure, so that finished goods can be directly exported from Goa. But nothing concrete has materialised.

Owing to the sensitive nature of the cargo, pharmaceutical companies prefer direct shipment from a port instead of trans-shipment, which could lead to delays.

A mid-size container vessel has a capacity of between 3,000 to 5,000 twenty-foot containers, which Goa simply cannot provide. Even a feeder ship – which transports containers from Goa to the JNPT port for loading onto a larger ship – needs at least 1,500 containers per week for a regular service. But port authorities say that Goa generates less than this number in a month.

Mr Sawant’s plan that the Mormugao Port could diversify into pharma exports and tourism and lower its dependence on coal imports does not seem at all feasible in the foreseeable future. His intentions are undoubtedly sincere. But, just as he has been unable to restart mining, it seems very unlikely that he will be able to reduce coal imports.

It’s up to the people now…