The 1080-mw Bhadrawati fast track power project in Maharashtra, promoted by Ispat group, has run into a fresh roadblock which could hamper the future of the project.
The promoters are required to get a clearance from the defence ministry for the captive coal mine before they proceed with the project.
The project which is estimated to cost around Rs 5,000 crore consists of a captive mine and a power project which are being promoted by the Ispat group.
The captive coal mine awarded by the ministry of coal is adjacent to the Chandrapur Ordnance Factory which makes explosives for the Defence forces. The promoters would extract coal from the mine using open cast technique which would involve using of explosives. As the mine is adjacent to the Ordnance factory the impact of these explosions could effect the factory.
The Maharashtra High Court has issued a stay order against the project after the sitting BJP MP from Nagpur Bhanwarilal Purohit filed a case against the project.
The explosives experts from the defence ministry would have to evaluate the impact of the explosions carried out in the captive mine. This would involve evaluating the impact of the explosions carried via air and land on to the Ordnance Factory.
Sources in the ministry of coal did recognise the vast problem that the Ispat group faced on account of the position of the captive coal mine but also said that this was the best possible coal mine available in the region that they could award to the promoters. Officials also indicated that in case the location of the mine is changed, the pricing of coal would also change.
The captive coal mine is being promoted by Central India Coal Company (CICCO), while the power project is being promoted by Central India Power Company (CIPCO).
The promoters as well the Union ministry of coal are awaiting the decision of the Attorney General on the holding company structure that the promoters want to adopt for the projects.
Under Ispats proposal, they want to have an apex company called Ispa Urja limited located in Mauritius which would be holding stake in CIPCO as well as in another shell company called Ispat Urja which would registered in India. This shell company would in turn be holding stake in CICCO.
The ministry of coal as well as the law ministry have shot down this proposal as they want the apex company to be registered in India.
