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Power ministry asks for review of coal block cancellation

Power ministry asks for review of coal block cancellation
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First Published: Thu, Jun 02 2011. 09 58 PM IST
Updated: Thu, Jun 02 2011. 09 58 PM IST
New Delhi: In an attempt to protect the expansion plans of state-owned NTPC Ltd, the Union power ministry has asked the coal ministry to review its decision to cancel the award of five captive coal blocks allotted to India’s largest power generation utility.
This followed NTPC’s request to the power ministry to help ensure it has enough supplies of coal. The utility had impressed upon its parent ministry the need for alternative sources of the fuel if the award was scrapped.
“We have not received any letter on the issue,” chairman and managing director Arup Roy Choudhury said. “We are a power generation company and not a mining company... The government should give us linkages. We have communicated the same to the power ministry.”
NTPC has been allocated eight captive coal blocks, but the coal ministry last month cancelled allocations to several companies, including five to NTPC.
The blocks awarded to NTPC are Pakri Barwadih (503 million tonnes, or mt, of mineable reserves), Chatti Bariatu (148.68 mt of mineable reserves), Chatti Bariatu South (400 mt of gross reserves), Kerandari (142 mt of mineable reserves), Dulanga (194 mt of mineable reserves), Talaipalli (843 mt of mineable reserves), Chichro Patsimal (2,000 mt of gross reserves), and Brahmini (1,900 mt of gross reserves).
The coal ministry has announced that the award of Chatti Bariatu, Chatti Bariatu South, Kerandari, Chichro Patsimal and Brahmini will be scrapped.
“We had earlier received showcause notices for all the blocks,” said another NTPC executive, requesting anonymity. “We have requested the power ministry to take up the issue. We don’t want our blocks to be cancelled as we are doing work on them. In the event of our blocks getting cancelled, we should be given coal linkages.”
Coal is critical for NTPC as at least 80% of its installed capacity runs on the fuel. The company plans to increase installed capacity from 34,194 megawatts (MW) now to 75,000MW by 2017 and 128,000MW by 2032.
It needs 160 mt of coal in fiscal 2012, of which around 16 mt has to be imported. The utility has already placed orders for importing 12 mt.
The coal ministry has been unable to ensure coal supplies for a number of upcoming power projects. India, the world’s second fastest growing major economy, plans to add 100,000MW during the 12th Five-year Plan (2012-17) to its current capacity of 174,000MW. The bulk of the targeted addition is coal-based. The gulf between shortage of coal and demand has widened from 4 mt in 2004-05 to 40 mt in 2010-11. The fuel is abundantly available in the country, but its exploitation has been hobbled by lack of investment and concerns over environmental damage.
Coal minister Shriprakash Jaiswal said a 6 June meeting will discuss the government’s coal distribution policy. “The new policy will be formed in two-three months,” he said. “The coal linkage committee meeting can be held only when there is coal available. When we don’t have much coal, what will be the use of having a coal linkage committee meeting?”
While state-run Coal India Ltd, which has an 82% share in national coal production, has been unable to keep pace with rising demand, captive coal mines allocated to various companies are yet to begin mining. Only 26 captive blocks of 208 are in operation.
utpal.b@livemint.com
PTI contributed to this story.
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First Published: Thu, Jun 02 2011. 09 58 PM IST