BOT operators demand restrictions removal on handling of coal

Operators are demanding removing restrictions on their handling of only one commodity like coal and their license should be converted to handle multiple commodities.

Regular importers of coal have stopped importing coal and decelerated evacuation of the already imported coal. This has affected the coal importing terminals operated by the Build, Operate and Transfer (BOT) under PPP model.

This has started to affect the financial viability of BOT operators as the volume of imports have got reduced and available storage yards are choked due to less evacuation.

BOT operators are currently limited to handling only coal which is classified as ‘Stressed Assets’ due to under-utilization of the installed capacities. The opening of the coal sector with commercial mining license for 50 new coal blocks will further increase India’s self-reliance and reduce imports.

The domestic coal sufficiency will certainly help India to conserve foreign currency but at the same time government needs to take note of the plight of sole coal handling terminals and use their latent potential to stimulate India’s export capacities.

Experts say they can play a key role in consolidating the economy further if restrictions on their handling of only one commodity like coal is effectively lifted.

Their export opportunities can easily be magnified by granting them multiple commodity handling license to boost the country’s positive export potential.

In the event of India consciously cutting down on its imports to become self-reliant, removal of solo licensing of commodity handling of BOT operators will ensure they do not get affected due to reduced import activity. This will help them boost the country’s economy and strategically place India as a global exporter. In the absence of this change, these businesses will languish due to falling import coal volume.

It will also exponentially add to livelihoods of those directly employed by the sector. COVID-19 added to their economic distress due to the global and national economic slowdown leading to job losses, but this can be reversed if single port operators are provided the opportunity to expand their terminal potential. This will allow them to amplify their contribution towards employment generation systematically, strengthen the state exchequer and sustain livelihoods.

A price discovery for handling other cargo could also make the process streamlined and transparent. The practice is similar to a mining, where if a different mineral is found in the mining area, a separate permission is granted by the authorities, but efficiency is retained.