 "SC ruling on coal blocks may hurt power investments")
The Odisha government, taking advantage of huge coal reserves in the state — nearly 25 per cent of the country’s deposit, had signed MoUs with 28 independent power producers (IPPs) in the past one decade for setting up of thermal projects with estimated combined generation capacity of 37,000 Mw.
Barring a few, most of these projects are reeling under inordinate delays over land acquisition and obtaining clearances to develop the allocated coal blocks. The ministry of coal had allocated 32 blocks in the state for captive consumption and later de-allocated seven blocks on their unsatisfactory progress. The blocks which have already been de-allocated, are Mandakini B (jointly given to OMC, Assam Mineral Development Corporation, Meghalaya Mineral Dev Corporation and Tamil Nadu State Electricity Board, Chennai), Utkal-D (OMC), New Patrapara (Tata Sponge Iron Ltd, Bhushan Steel, JSW Steel and SKS Ispat), Naini (Gujarat Mineral Development Corporation and Pondicherry Industrial Promotion Development & Investment Corporation Ltd), Baitarani West (Odisha Hydro Power Corporation and Gujarat Power Corporation Ltd) and two blocks allotted to Coal-to-Liquid (CTL) projects, North of Arkhapal Srirampur block awarded to Tata Sasol and Ramchandi block given to JSPL.
Now the SC deeming all coal block allocations as ‘illegal’ has put question marks on other blocks. The projects to be affected if the apex court takes an extreme stand in its further hearing next month, include those of Hindalco Industries, Jindal Steel & Power Ltd (JSPL), Tata Sponge Iron Ltd, Indian Metals & Ferro Alloys Ltd (IMFA), National Aluminium Company (Nalco), state run firms like Odisha Mining Corporation (OMC) and Odisha Power Generation Corporation (OPGC) and also a few PSUs of other states.
For the IPPs who have already pumped in over Rs 30,000 crore to see their projects grounded, the top court's observation has come as a dampener. Among the IPPs, the investments have mainly flown from Vedanta Group firm Sesa Sterlite, GMR Kamalanga, Jindal India Thermal Power Ltd (JITPL) Ind-Barath Energy Utkal Ltd and Monnet Power.
While Sesa Sterlite has fully commissioned its 2,400 Mw plant at Bhurkamunda near Jharsuguda, GMR has put on stream three 350 Mw units of its plant at Kamalanga in Dhenkanal district. Both the proponents have been running their plants on linked coal supplies despite winning coal blocks. Others like JITPL, Ind-Barath Energy and Monnet Power were in advanced stage of commissioning their projects. But block allocatees have reserved their comments and instead pinned their hopes on the final SC order.
“We are not in a position to comment as we are currently evaluating the SC judgement and the implications for JSPL”, Prashant Kumar Hota, spokesperson for JSPL said through an e-mail response.
An IMFA source said, “We will honour the SC ruling. But we will offer a comment after going through the full text of the court ruling.”
The SC today held that all coal block allocations made since 1993 till 2010 by the NDA and UPA regimes were done in an illegal manner without application of mind.
The top court that took scrutiny of 218 coal blocks said, common good and public interest suffered heavily since “there was no fair and transparent procedure, all resulting in unfair distribution of the national wealth.”
Citing that allocations made both under the screening committee route and the government dispensation route are arbitrary and illegal, the SC underscored the need for further hearing fixed on September 1.
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