The coal ministry today cancelled allocation of five blocks to state-run NTPC, saying the country’s biggest power producer was not serious about the development of these blocks.
This is despite the power ministry’s request to review the decision taken last month, to cancel the allocations. In the past seven years, the coal ministry allocated eight blocks, including these five, to NTPC.
“The company shall not be eligible for allocation of any alternate coal block in lieu of the ‘deallocated’ blocks,” the coal ministry said in a letter to NTPC.
These five blocks — Chatti Bariatu, Chatti Bariatu (South), Kerandari, Brahmani and Chichiro Patsimal — have a combined reserve of three billion tonnes (bt).
NTPC, however, denied any lag in its efforts to start production from its mines. “Time schedule for development of captive blocks is 36 months if no forest land is involved and 42 months if forest land is involved,” the company said in an e-mail reply.
“Even according to global standards, it takes around seven-eight years. Hence, the contention of the coal ministry about delay in development of blocks by government companies is not justified,” the company added.
A senior power ministry official said they had not received any intimation from the coal ministry on the matter. He said, “There can be no fault-finding in the coal ministry’s efforts to send a strong message that delay in development of blocks would invite serious action.”
The coal ministry’s decision, based on the recommendations of a committee headed by special secretary Alok Perti, is likely to affect NTPC’s plans to meet around 20 per cent of its coal requirement of 250 mt through captive production by 2017.
After the ministry last year found only 23 of the 203 captive coal blocks allotted since 2003 had been able to commence production, it initiated a review of the development status. It later issued showcause notices to 84 captive coal block holders, including ArcelorMittal, Tata Steel, Jindal Steel and Power and NTPC.
Two of the five ‘deallocated’ blocks, Brahmani and Chichiro Patsimal, were to be developed by an equal joint venture between NTPC and state-owned Coal India Ltd. Coal from the two blocks in Orissa was to be used for the Kahalgaon and Farakka expansion projects of NTPC. These blocks, with a combined reserve of more than 2 bt, were originally supposed to commence production from this October.
Chatti Bariatu and Chatti Bariatu (S) blocks have reserves of 552 mt and Kerandari has reserves of 285 mt. The three blocks are located in the North Karanpura coalfields in Jharkhand. Overall, the eight coal mines allotted to NTPC possess reserves of around 5 bt. All these were expected to commence production between April 2008 and March 2012. NTPC has set a target of ramping up coal production from its captive mines to 47 mtpa by 2017.
NTPC consumes around 150 mt of coal to operate 36,000 Mw capacity annually. Its shares today closed 0.1 per cent down at Rs 177 on the Bombay Stock Exchange.
The coal ministry has also deallocated the Saharpur Jamarpani coal block of Damodar Valley Corporation and the Banhardih block of Jharkhand Electricity Board.
