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GVK Reddy calls ongoing coal bidding unfair

GVK Reddy, chairman and managing director of GVK Power and Infrastructure Ltd, on Thursday called the cancellation of coal mine allocations by the Supreme Court and the ongoing coal bidding unfair. “It’s not correct bidding, we have gone to the court,” Reddy said speaking to reporters on the sidelines of an event in Hyderabad. Reddy expressed concern over availability of coal and its pricing for independent power producers. Reddy said it is better if public sector Coal India Ltd supplied all the coal. GVK was hit by the Supreme Court’s judgement in September that cancelled 204 coal blocks allotted to private companies. GVK’s coal block allotted at Tokisud north in Jharkhand for its upcoming 540 MW coal-fired Goindwal Sahib Thermal Power Project in Punjab, was part of the 204 coal blocks cancelled by the Supreme Court. The power project is set become operational by the end of this quarter. The mine allotted to GVK falls in the schedule II or producing mine category. Under the schedule II (producing mines) category, 23 blocks were put on offer. The auction was held between 14 and 22 February and the vesting orders are expected to be issued by 23 March. GVK approached the Delhi high court in February challenging the Coal Mines (Special Provisions) Ordinance, 2014 as well as the auction process due to low compensation for the assets it deployed at a coal mine. GVK said it has invested Rs.1,083.23 crore on development of coal blocks. The company has argued that the compensation of Rs.57 crore decided by the Pratyush Sinha committee for its Tokisud block in Jharkhand was grossly inadequate. The court issued notices to the coal ministry to respond to GVK’s petition and said the coal block auction being carried out by the Centre will be subject to the outcome of the writ petition.

source: http://www.livemint.com