Ambanis qualify for $6-8 bn coal-to-liquid project

Ambanis qualify for $6-8 bn coal-to-liquid project
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First Published: Sun, Aug 24 2008. 12 19 PM IST
Updated: Sun, Aug 24 2008. 12 19 PM IST
New Delhi: Mukesh Ambani-run Reliance Industries and Anil Ambani’s Reliance Infrastructure are the only two companies to have qualified for the $6-8 billion project to convert coal into oil, as per the criteria set by the government.
“Firms run by the two Ambani brothers were the only ones to meet the minimum networth criteria of Rs4,000 crore and had an agreement with a foreign firm for technology to convert coal into liquid petroleum,” sources in the Coal Ministry said.
Besides the Ambanis, seven firms met the minimum networth criteria including Steel Authority of India Ltd (SAIL), GAIL India, GMR Infrastructure, Indian Oil Corp and JSW Steel.
Of these, SAIL and JSW did not meet the eligibility criteria of having a collaboration or tie-up with a proven technology provider, while GAIL, GMR and IOC only furnished assurance letters from the technology provider and no documents related to MoU/agreement were provided.
Sources said on preliminary examination of the 22 bids received for the CTL project at Radhikapur coal block, Srirampur block and Ramchandi Promotional coal block in Orissa, seven more companies fulfilled the networth criteria if their parent firms’ balance sheets were taken into account.
Those qualifying under this category include Tata Group firm Strategic Energy Technology Systems, Essar, Sterlite Energy, Vedanta Aluminium, Jindal Steel and Power, Vista Natural Resources and RICON Infrastructure.
Tatas, Essar, Sterlite, Vedanta, Jindal Steel and VistaNatural Resources had technology tie-ups, while RICON had none.
Sources said an Inter Ministerial Group (IMG) will decide if assurance letters for technology tie-ups and parent company networth would qualify a company for the CTL project.
Networth criteria
However, Anil Ambani Group’s Reliance Power could not qualify the networth criteria. Others who did not meet this criteria include Solar Industries, Jai Balaji Industries, Shriram Infrastructure and Power, Welspun, Adani, Indiabulls Energy and Bhushan Steel.
Tata Group’s SETSL, Sterlite Industries subsidiary Sterlite Energy and UK-based Vedanta Resources unit Vedanta Aluminium did not meet the Rs4,000 crore minimum networth criteria but their parent companies balance sheets were enough to qualify the benchmark.
In their applications, a couple of the companies said their proposed CTL plants would have a capacity to produce 80,000 barrels of oil a day (4 million tons annually). The Ministry of Coal has offered three coal blocks in Orissa with cumulative reserves of about six billion tonnes for the project.
“Though there are three coal blocks on offer, only one would be actually allocated for the CTL project. Companies, however, can give their choices for the block,” the official added.
The IMG comprises Secretaries of Department of Coal, Expenditure, Industry, Science and Technology, Petroleum and Principal Adviser (Energy) of the Planning Commission. The IMG would be chaired by a member Energy of the Planning Commission.
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First Published: Sun, Aug 24 2008. 12 19 PM IST