In a setback to Gujarat Mineral Development Corporation (GMDC) and Puducherry Industrial Promotion Development & Investment Corporation (PIPDIC), the Coal ministry has issued showcause notice to these two state PSUs for inordinate delay in development of the Naini coal block allocated to them.
Holding the companies responsible for delay in developing the coal block, the ministry has urged them to respond to the notice in 20 days.
“In the review meeting held on January 11-12 this year, it was noticed that the companies have not made serious efforts to develop the coal block even after repeated assurances. It is also noted that all important milestones such has grant of previous approval, mining plan, environment management plan, mining lease, forest clearance and land acquisition are pending”, the notice stated.
While submission of mining plan had lapsed by over two years, land acquisition which was scheduled for completion by October 25 this year has not gained much ground.
The schedule of end-use projects of GMDC and PIPDIC were also yet to be notified to the ministry. The coal block was allotted to the two firms in July 2007 on condition that captive production from the block would begin within a span of three years.
The Coal ministry's notice has poured cold water over the plans of both GMDC and PIPDIC which had planned to supply coal mined from the block to third parties instead of consuming it for their end-use plants, in stark violation of the principle of captive consumption.
When contacted, GMDC officials informed that the company has sent its response to the showcause notice to the coal ministry. "On Wednesday, we've sent our response to the coal ministry," said top GMDC official.
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GMDC had intensified efforts to ship coal for power projects of Adani Enterprises and Torrent Power in its home state- Gujarat instead of pursuing its proposed 1500 MW coal-fired plant in Angul.
Similarly, PIPDIC had entered into a coal supply pact with KSK Group firm JR Power Gen Ltd to meet the dry fuel need of the company's 1980 MW power plant.
Irked over such back-door coal supply deals, Chief Minister Naveen Patnaik had written to Union coal ministry in January this year to review all the coal block allocations in Odisha stating that a number of PSUs belonging to other states who had won coal blocks were non-serious in development of the blocks.
Some companies who were allocated the coal blocks for captive use of coal in their end-use plants, had entered into back-door arrangement for sale of coal to other parties, violating the very principle of captive consumption, Patnaik pointed out in his letter.
The Odisha government held that coal blocks allocated to 11 PSUs of other states were unjustified, mainly on lack of seriousness shown by the allocatees.
Opposing GMDC's move, Patnaik had said that additional supply of coal from Odisha coalfields to Gujarat over and above Machhakata and Mahanadi coal blocks, is not justified, particularly when the ongoing power plants in the state are not able to get their coal requirement.
Patnaik had also questioned the allotment of coal block in favour of PIPDIC, which has neither any power plant in Odisha nor any concrete proposal or Memorandum of Understanding with the state government for a new power plant.