There seems to be a serious divide within the Planning Commission over the implementation of the country's first $8-billion coal-to-liquid (CTL) project by the Tata group and its South African partner Sasol. The inter-ministerial group (IMG) headed by Planning Commission member (energy) Kirit Parikh had in February-end, given its consent to the Tata-Sasol project. The Tata group has sought access to 30 million tonne a year of coal for producing 3 million barrels of oil and 1,500 mw of power for the CTL project. Following the in-principle clearance to the project, the IMG chairman had even recommended the case to the coal ministry for allocation of a coal block. This was done after addressing the concerns raised by some of the IMG members including the principal adviser (energy), Planning Commission, Surya P Sethi and finance ministry representative over the implicit subsidy issue to the Tata-Sasol project through allocation of a coal block. However, the principal advisor (energy), Planning Commission, has issued another warning note on March 27 (after his earlier dissent note of February 29) to all the IMG members including secretaries of coal, DIPP, department of science and technology along with other senior officials from the ministries of finance and petroleum. In his recent note, Sethi has given details of an exercise, conducted recently to estimate the level of this subsidy. The IMG members have been informed that while the FOB price of coal per unit of energy content is 133-383% of the pithead price of coal in India, the specific coal that the Tata's have desired for its CTL project will be priced at only 26% of the FOB price. Thus there is a massive implicit subsidy, the note said. Addressing the contentions raised earlier by DIPP secretary Ajay Shankar that the subsidy was also available to all non-power users, the note said, "This, too, was analysed further and it is noted that the single Tata-Sasol CTL project would double the amount of such subsidised coal being made available to a few hundred non-power end users in the recent years.' "Should we still wish to allot a block to Tata's for its CTL project, the government would be well advised to consider charging a cess on the coal produced from the block so as to substantially remove the implicit subsidy on coal. The amount so collected can be used for addressing environmental concerns related to CTL project,' said the principal advisor energy in his note to the IMG members. Sethi has also stated that expression of interest should be obtained from competitive developers so as to ensure that the most efficient technology is used for converting the scarce domestic coal to liquids, This, he said, would minimise the high energy penalty.