Coal news and updates

In the next three to five years, Odisha can look forward to  the development of four coal mines that the Ministry of Coal plans to auction in January next year. This is likely to facilitate the development of Sundargarh UMPP (Ultra Mega Power Project), designed to generate 4,000 MW of power from Odisha Integrated Power Ltd.These coal mines are located in the Talchar fields, Brahmbil, Phuljhari (east and west), and Kordabehal, and these are likely to come under the hammer. The RFQ (Request for Quotation) for Sundargarh, by global invitation, has been issued on 25th September. This is a design, build, finance, operate and transfer (DBFOT) project and the last date for submission has been stated as 10th November 2013.

 

 

According to information available, this is the first of the three 4,000 UMPPs the government plans to do in Odisha.  The others are Serkhigopal (Serkhigopal Integrated Power Company Ltd) and Ghogarpalli (Ghogarpalli Integrated Power Plant).

 

 

 

Only last week, the Cabinet Committee on Economic Affairs (CCEA) approved the policy for coal block auction, based on competitive bidding. Further details are expected shortly.

 

 

 

A detailed study of the documents reveals that, if necessary, precautions have been taken to ensure that the bidding is restricted to power generating companies that are not involved in the CBI (Central Bureau of Investigation) investigations and that they have a clean business record for development. In the next few weeks, one may be able to know the likely or prospective candidates who may make the bids.

 

 

 

It is of interest to note that Vedanta group, led by Anil Agarwal, may also participate in the RFQ process, as a start. Their subsidiary, Sterlite Energy, already operates a 2,400 MW thermal power plant at Jharasaguda and their overall plans are to operate 10,000 MW of power, and are in the process of setting up a 1,980 MW plant at Talwandi Sabo in Punjab, which is likely to go into stream by October 2014.

 

The crucial points to consider in the Talchar field auction of the above coal blocks relate to the present status of the environmental clearances that are required to be completed. On one hand, the Odisha government would do well to expeditiously take steps to study and be prepared to offer assistance to the successful bidder at the auctions. In other words, they need to take pre-emptive measures to ensure that the successful bidder does not grope in the dark after getting the contract. Likewise, the bidders too must do the homework because of our history of successful bidders not being able to commence work within a reasonable time after the awards are made.

 

 

 

Time is the essence of these contracts, particularly when power is in short supply, and, even after obtaining the coal blocks, it would take sometime before coal can be dug out for supplies to the plant. The preparation should be that development of the coal blocks must be such as to be able to deliver the coal before the trial runs can be made at the power plant!

 

 

 

A tall order, no doubt, but efforts are to be made to achieve such goals.

 

Source: moneylife.in