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The state’s energy sector has slumped in the wake of yesterday’s tough Supreme Court verdict that cancelled 214 of 218 coal block allocations in India, leaving proposed power projects of Essar, Abhijeet Group, Jindal Steel & Power Limited and Jharkhand Urja Vikas Nigam Limited in the lurch.

Rebel-hit Latehar, which could have been a powerhouse with private majors Essar and Abhijeet Group each investing over Rs 2,000 crore in their projects, seems to be the district that the apex court order has hit the hardest.

A source in Essar Power Jharkhand Limited told The Telegraph today that they had pumped in over Rs 2,000 crore in their Latehar thermal power plant. Essar was allocated Chakla and Ashok Kerketta coal blocks that now stand cancelled.

“Work was slow (read literally stalled) in Latehar. Financial issues cropped up when uncertainty over coal block allocations first started making the rounds. Now with coal block allocations cancelled, we do not know about the fate of the plant,” he said.

“A linkage, if any, via a Coal India Limited subsidiary will be a costly affair,” he added.

According to an MoU signed with the state, Essar Power will give 25 per cent of the proposed 1,800MW electricity generated from its plant in Chandwa (Latehar) to Jharkhand. But now, no one is sure when and how the project, supposed to be inaugurated in 2013, will shape up.

Abhijeet Group, which pumped in around Rs 2,000 crore for its proposed power plant in Latehar, is also in a fix. That the firm, despite not belonging to the corporate top drawer, was allocated at least four coal blocks in the state, had raised eyebrows. Now, the quartet are cancelled.

Work on Jindal Steel & Power Limited’s Godda power plant was in full swing after President Pranab Mukherjee laid its foundation early last year. Now, the company’s coal block allocations in Santhal Pargana area stand cancelled.

Jharkhand Urja Vikas Nigam Limited, which wanted to develop a power plant at Patratu in Ramgarh on public-private partnership (PPP) mode, and had received a Banhardih coal block, may also have to shelve its plans. The allocation stands cancelled.

Since 1993, 62 coal blocks were allocated in Jharkhand, 32 to PSUs and 30 to private players, including the likes of ArcelorMittal, Tata Steel, Usha Martin, Tata Power, Calcutta Electric Supply Corporation, Jindal Steel and Power Limited. Most were done to enable steel plants generate captive power for production, say for instance Seregarha coal block for ArcelorMittal.

Jharkhand’s mining sector is also moribund with 12 iron ore, five bauxite, three copper, a couple of uranium mines and others closing in August after a ban from the mines and geology department on operations where second and subsequent lease renewals are pending. Till date, the state government has kept mum.

Source: The Telegraph, Kolkata