Govt evincing little interest in coal block allocated in Odisha

*Benefits unlikely to be obtained for next 5 yrs
Mohinder Verma
JAMMU, June 7: In a testimony of non-serious approach towards the otherwise priority sector, Jammu and Kashmir Government has failed to initiate first step towards obtaining the benefit of coal block allocated by the Union Coal Ministry about two years back. Moreover, because of the slackness of the concerned authorities even the formal allotment letter could not be obtained till date from the Union Government.
Official sources told EXCELSIOR that for the first time in the history of Jammu and Kashmir, the State Power Development Corporation (SPDC) bagged coal block in Kundanli-Luburi area of Odisha for power sector in the month of July 2013 for a period of 25 years.
Jammu and Kashmir State Power Development Corpora-tion was among the 15 States and six Central Public Sector Undertakings, which were allocated coal blocks on the recommendations of the Inter-Ministerial Committee and under auction by competitive bidding. The JKSPDC was allocated the coal block having geological reserve of 130 and 266 Million Tonnes respectively jointly with National Thermal Power Corporation (NTPC) Limited as the State has no experience in exploration of coal mines.
Thereafter, the Union Coal Ministry put a condition that allotment letter will be issued to the Joint Venture Company to be formed by the joint allottees and not to individual parties where block has been allocated to more than one party, sources informed.
Pursuant to the decision of its Board of Directors, Jammu and Kashmir State Power Development Corporation engaged M/s SBICAPS for sensitivity analysis of various options and accordingly advise on the way forward essentially with regard to location of the end use plant.
It is pertinent to mention here that SBI Capital Markets Limited (SBICAPS) is India’s largest domestic investment bank offering the entire gamut of investment banking and corporate advisory services.
SBICAPS in its report mentioned that with coal availability of 3.40 million tonnes per annum (assuming that extractable coal reserves would be 60-70% of geological reserve of 130 MT for 25 years), the installed capacity works out 660 MW (supercritical unit), sources said, adding the SBICAPS also mentioned in the report that net financial impact by locating the project in J&K vis-à-vis Odisha would be Rs 700 crores per annum which translates to over Rs 18000 crores over the lifeline of the project.
After analyzing the report of SBICAPS, the State Government vide Order No.131-PDD dated June 20, 2014 approved the formation of a Joint Venture Company of Jammu and Kashmir State Power Development Corporation and National Thermal Power Corporation (NTPC) with an equity stake of 33:67 respectively with such share determined by the share of coal in the coal mine as well as setting up of end use power plants in Odisha, sources said.
Though draft Joint Venture Agreement has been cleared by the Law Department of Jammu and Kashmir, formal signing of the pact has yet not taken place, sources disclosed, adding “the draft JV pact is gathering dust during the past several months with no further progress because of least interest of those at the helm of affairs in the JKSPDC and top brass of State administration”.
“The concerned authorities of JKSPDC and those responsible for ensuring early progress on this vital project are soft-paddling despite being aware of the fact that Union Coal Ministry will not issue formal allotment letter unless the JV Company is floated”, sources regretted.
Stating that benefits of allocated coal block are unlikely to be obtained for a minimum of next five years, sources said, “on the receipt of formal allotment letter, the Joint Venture Company would have to explore the coal block, which will take minimum three years and thereafter establishment of plant would take minimum two years time”.
“If some hurdles crop up in exploration of block and establishment of plant then obtaining of benefits from the coal block would get stretched beyond imagination”, sources further said while regretting that all these aspects are not being given due consideration by the concerned authorities of J&K, which is evident from the fact that Joint Venture Company has not been floated, which otherwise is a foremost step.
When contacted, Principal Secretary, Power Development Department, Sundeep Nayak confirmed that Joint Venture Company between JKSPDC and NTPC has yet not been floated. “All the documents are ready and this step can be initiated any time”, he added.

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