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Punjab hands over coal mine to controversial firm

The Punjab government has once again given the coal mining contract to a controversial firm that had last year “blackmailed” the state power corporation by curtailing coal supplies to increase rates.

The Punjab Cabinet, on the recommendation of Punjab State Power Corporation Limited (PSPCL), has decided to hand over the mine allocated to it by the coal ministry to EMTA till a new developer is finalised.

The corporation has already floated tenders for finalising a new developer but the entire process may take four to six months.

Sources said the PSPCL proposal didn’t mention that it was the same company that had blackmailed the Punjab power utility leading to power crisis last summer.

PSPCL was reallocated the Pachhwara coal block ( Jharkhand) this year. The coal supply is expected to resume from the mines in the next six months after PSPCL finalises the new operator.

Earlier, EMTA, in joint venture with PSPCL, was operating the Pachhwara coal mine under the company name PANEM.

The Comptroller and Auditor General (CAG) had raised serious questions over the PSPCL’s joint venture with EMTA. “The tenders floated for selecting a joint venture partner were full of ambiguity. The PSPCL, however, didn’t invite fresh bids,” the CAG report had said.

PANEM had in 2013 and 2014 curtailed the coal supplies to PSPCL in summer forcing the power firm to shell out a huge sum running into several hundred crores to restore supplies.

Explaining the urgency behind the move, PSPCL chairman-cum-managing director KD Chaudhri said: “It will take another six months to finalise the new developer. We don’t have time. During summers, we need extra coal to meet the rising power demand. So the proposal was forwarded to the state government, after considering all pros and cons.” He added that EMTA coal will cost less than that of Coal India Limited.

Also, a fire had broke out in the mine and it became imperative to douse it before it turned the entire coal stock into ash, he said. “We asked the Jharkhand government for help, but they didn’t have infrastructure to tackle the mine fire. So, we had to initiate dialogue with EMTA to start operations,” said Chaudhri.

On EMTA’s chequered track record, he said: “We won’t let anyone exploit us this time.”

source: http://www.hindustantimes.com