Coal blocks set to be finalized for power sector on Thursday

Coal blocks set to be finalized for power sector on Thursday

With state governments submitting details on their due diligence (or check) of bidding companies, the decks have been cleared for awarding 15 coal blocks to the power sector at a meeting of the coal ministry’s screening committee on Thursday.

A senior coal ministry official who did not wish to be identified confirmed the development and said: “The coal blocks will be finalized only for the power sector in this meeting."

The government is keen to fast-track the allotments, since these coal blocks alone have reserves of around 3.6 billion tonnes, capable of generating 18,000MW of power.

The coal ministry had earlier asked respective state governments to do an exhaustive due diligence of companies whose names were forwarded to it for allotment of 38 coal blocks. Out of these, 15 blocks were exclusively reserved for the power sector, with the remaining blocks to be given to non-power sectors such as cement, iron and steel.

The verification was to weed out non-serious players and ascertain whether the claims made by the developers in terms of their net worth and project status stood up to scrutiny. The screening committee is headed by the coal secretary H.C. Gupta and has representation from the ministries of power, steel and environment and forests, apart from the state governments of Orissa, Jharkhand, Chhattisgarh, West Bengal and Maharashtra.

The Central Electricity Authority (CEA) had forwarded a list of 44 power project developers for 15 coal blocks to the power ministry. The power ministry, after a scrutiny, had pruned the list to 28 companies before forwarding it to the coal ministry.

The final shortlist includes RPG Group’s CESC Ltd, Essar Power Ltd, AES Chhattisgarh Energy Pvt. Ltd, Reliance Energy Ltd’s Rosa Power Supply Co. Ltd, Adani Power Ltd, Tata Power Ltd, GMR Energy Ltd, Navabharat Power Pvt. Ltd of the Malaxmi Group, and Lanco Infratech Ltd.

Kuljit Singh, a partner at accounting firm, Ernst & Young said: “In future the process should be more streamlined. There should be a single criterion which should be objective and be understood by everyone."

These allotments are critical because coal accounts for more than 50% of India’s commercial energy consumption and around 78% of domestic coal production is dedicated to power generation.