Coal news and updates

The Coalgate controversy has now led to state-owned power generator Mahagenco being rapped. The penalty comes for not extracting coal from a mine although it is the state government itself that has put mining out of bounds. Mahagenco, along with Chhattisgarh Mineral Development Corporation (CMDC), and Uttar Pradesh Vidyut Nigam was jointly allotted the Chendipada coal blocks in Odisha.

 

As the joint venture (JV) could not start mining even after five years of allocation, the inter-ministerial group (IMG), conducting a review in light of the Coalgate affair, has recommended to deduct half of the bank guarantee (BG) worth Rs 16 crore. The terms call for deducting half of the BG when the milestones for starting production are not met in time. The other half is liable to the deducted when the guaranteed level of production is not reached.

 

However, the other stage seems to be a far cry, as starting the mine itself seems to be difficult. The Odisha government is in no mood to allow mining in this area at all. The IMG noted that even as the mining plan has been approved in 2001, Odisha government has been holding the forest and environmental clearances. It has also communicated to the Centre, stating its objection to mining in the Talcher area where this JV and 11 PSUs have mines.

 

Mahagenco maintains that it is not much a of loss as it has a minority share of 17% in this mine. However, according to IMG's notings, Mahagenco has also invested Rs 49 crore in the end-use plant for using the coal mined from this block.

 

Bhusan Steel, the private firm which has tied up with CMDC to use the coal, is reported to have ended up spending Rs 1,672 crore in setting up its plant. The power generation company of UP has invested Rs 90 crore in two of its end-use plants. The total investment in the mines itself stands at Rs 20 crore.

 

The JV has maintained that had it not been for the objection by Odisha government the mine could have started by 2015. The IMG further noted that considering the state's stance, it has been decided not to de-allocate the block.

 

Mahagenco, along with Gujarat State Electricity Corporation Limited (GSECL), has also been allotted the Machakatta block in Odisha. "However, even though administrative proposals have been secured, land acquisition remains for this project. Even as 60% of the PAPs have agreed, the deal is being reworked in light of the new land acquisition act," said a senior Mahagenco official.

 

 

Source: http://timesofindia.indiatimes.com/