In a major development for Maharatna power generator NTPC Ltd, the coal ministry is set to restore its five captive coal block allotments in a week. The blocks were cancelled earlier this year on grounds of delays. The move would boost the plans of the Rs 57,000-crore company to more than double generation capacity to 75,000 Mw by ramping up in-house coal production to 47 million tonne (mt) per annum, one-fourth of its coal requirement over the next five years.
The decision has been prompted by a mix of factors including an urgent need to bridge the burgeoning gap in coal demand and supply, firm commitment of rapid development of the blocks from NTPC, the huge investments already made by the company on power projects linked to the blocks, pressure from the power ministry for restoring the blocks and the recent coal supply crisis.
“NTPC has assured us of quicker development of blocks now. Also, there have been many requests from the power minister. We are likely to give the blocks back as soon as the report of the review committee is submitted in four-five days,” coal minister Sriprakash Jaiswal told Business Standard. He also added NTPC, being a government company, deserves preference in this matter.
An intra-ministerial review committee headed by coal secretary Alok Perti has been reviewing the ministry’s decision, taken in May this year, to cancel 14 coal blocks and one lignite block awarded to six public sector undertakings, including NTPC.
Apart from rejuvenating the company’s fuel securing strategy, the decision would also set at rest months of uncertainty over the progress of the government’s captive coal production plan, as NTPC’s blocks account for a major chunk of such reserves allotted so far.
The five cancelled blocks -— Chatti Bariatu, Chatti Bariatu (South), Kerandari, Brahmani and Chichiro Patsimal — have combined geological reserves exceeding 3 billion tonne (BT). The first three blocks are meant to supply fuel to two power plants of 1,320 Mw capacity each — Barh in Bihar and Tanda stage II in Uttar Pradesh. Both the projects, when commissioned, would require over 10 mt of coal annually. The other two blocks are meant to feed the expansion of Kahalgaon power project in Bihar and Farakka in West Bengal.
| WAITING FOR APPROVAL | |||
| Coal block | Date of allocation | Target date* | Status of progress |
| Pakri-Barwadih | Oct ‘04 | Apr ‘08 | Environmental nod granted, awaited, order for coal handling plant awarded |
| Chatti Bariatu | Jan ‘06 | Jul ‘09 | Environmental nod granted, forest clearance awaited |
| Kerandari | Jan ‘06 | Jul ‘09 | Environmental nod granted, forest clearance awaited |
| Talaipalli | Jan ‘06 | Mar ‘12 | Environmental nod and forest clearance awaited |
| Dulanga | Jan ‘06 | Sep ‘11 | Environmental nod and forest clearance awaited |
| Brahman & Chichiro Patsimal | Jan ‘06 | Oct ‘11 | JV company with CIL incorporated in April 2010, exploration underway |
| Chatti Bariatu (South) | Jul ‘07 | Jan ‘11 | MoU with Mineral Exploration Corp being finalised for exploration, application for land acquisition being submitted |
| *Target date of production Source : NTPC | |||
An NTPC official informed that almost a half of the Rs 6,600 crore investment in Barh has already been made. “Also, Tanda stage II is in advanced stage of progress and the first unit is expected to be commissioned in early 2012-13,” the official said.
NTPC was awarded a total of eight coal blocks over past seven years with reserves of around 5 BT. All these were expected to come into production between April 2008 and March 2012. However, not a single block has commenced production so far.
The review exercise could be extended to the cancelled blocks of Damodar Valley Corporation, another PSU under the power ministry, and Jharkhand State Electricity Board (JSEB). The coal ministry had cancelled DVC’s Saharpur Jamarpani block in Jharkhand and Gondulpara coal block in the same state, jointly allocated to DVC and Tenughat Vidyut Nigam (TVNL).
The coal shortage in the country has led to stranded power capacity of around 40,000 Mw. While the supply target by Coal India for the power sector during the current fiscal stood at 382 MT, the company has reduced the target to 343 MT owing to lower production. Overall coal shortage currently stands at around 80 MT against annual demand of over 600 MT. The shortage is set to jump to over 200 MT by the end of the twelfth Plan period in 2017. NTPC, the biggest power generator in the country, alone consumes around 120 MT coal annually to fire its 36,000 Mw power generation capacity.
The company’s share price at the Bombay Stock Exchange closed at Rs 171.15 on Monday, up 1.12 per cent as compared to previous close.
