Sasan success is cold comfort for Lanco

Though Lanco Infratech Ltd has "informally" been awarded the 4,000 Mw ultra mega power Sasan project in Madhya Pradesh, the company has not received a good treatment from the MP government for its proposed 1,200 Mw power project.

Bureaucrats in the state have allegedly made a supplementary recommendation for a cement company even after recommending Lanco for a coal block allocation in January.

"The department of power has also not signed an MoU with the company on basic facilities," a source in the company said. Lanco's 1,200 Mw thermal power project is proposed to be set up in Chhindwara (Madhya Pradesh).

The state government had recommended Occidental Power Private Ltd (wholly owned by the Lanco group) for the Mandla North coal block in the Pench Kanhan coal-mining area to the Centre.

"State mining department officials sent a supplementary note of recommendation to the Central government to allocate the Mandla North coal block in a ham-handed manner on July 12," a source in the company told this paper, and it was confirmed by the department of industry.

The company had also written to Chief Secretary Rakesh Sahni in this regard but received no response. "The Union Ministry of Coal will be finalising allocation of coal blocks soon. The original recommendation (for the coal block allocation) sent in January by the state government (to the Centre) was based on the merits of the firm's proposal and laid priority on power.

"The subsequent recommendation for a cement unit (non-power sector) has eroded the priority given to the power sector. We gather that the non-power sector business proposes to use coal from the Mandla-North coal block for its existing units at other places in Madhya Pradesh and proposed cement units in other states involving transportation up to 1000 km," said the Lanco Infratech letter to the chief secretary.

Sources in the government and the company say the state government has recommended the Jaypee group separately for the non-power sector.

Rakesh Agrawal, secretary, department of mines, could not be reached. However, Rakesh Sahni told Business Standard recently "coal allocation is in the Central government's hands."

The company filed its application to the Madhya Pradesh Trade and Facilitation Corporation (TRIFAC) on May 27 for the project. The Rs 6,000 crore project (including power and mining) is likely to be completed within the 11th plan.

The company had applied for coal in two blocks of Chhindwara, owned by Coal India last year.