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EMTA takes Punjab and Karnataka to court on coal mining rights

Private mining development operator EMTA (formerly Eastern Minerals & Trading Agency) has dragged the state-owned power companies of Punjab and Karnataka to court after its appointment as mining development operator (MDO) was struck down by both the states.

In the coal allotment process held in March, Karnataka Power Corporation Limited (KPCL) was allotted a cluster of mines — Baranj I to IV, Kiloni & Manora Deep in Maharashtra — while Punjab State Power Corporation (PSPC) got the Pachhwara Central mine in Jharkhand. These mines were allotted for power plants. In July 2015, KPCL and PSPC directly appointed Ujjal Upadhayay-promoted EMTA as MDO instead of using the tender route. The coal ministry slapped a showcause notice on the two utilities for bypassing the tender route.

The coal block allocation guidelines suggest that MDOs be selected through a fair and transparent tender process.

In November-December last year, KPCL and PSPC had started a tendering process to select an MDO. But, EMTA went to the high courts concerned asking for right of first refusal from the state utilities.

The matter is sub-judice at the High Court of Punjab and Haryana. But, a Bench in the Karnataka High Court had agreed with EMTA’s claim. The Karnataka government and KPCL, then, appealed against the ruling and the matter is now being heard.

EMTA was the MDO for these two state utilities when these owned coal blocks before the Supreme Court cancelled the allocations in August 2014. While the mine was allotted to a state, the holding stake of the joint venture was with MDO, a private entity. EMTA had a 74 per cent stake in the joint venture with these two state power utilities, when the apex court struck down the arrangement.

EMTA, formerly known as Eastern Mineral & Trading Company, held the second largest tranche of coal blocks as their MDO when they were allocated earlier through a screening committee route. Ujjal Upadhayay-promoted EMTA signed joint ventures with around seven states and held close to 74-per cent share. The coal reserves were estimated to be close to 1.7 billion tonne. EMTA is one of the key accused in the coal scam case for allegedly ignoring the clauses for forming joint ventures and getting pecuniary gains through the arrangement. MDO were supposed to be hired on contract.

Source: Business Standerd