Coal block uncertainty casts shadow on Odisha Thermal Power project

Originally allotted Tentuloi, in which extraction was tough and could push up production costs

The 2,400 Mw coal-based power plant proposed by Odisha Thermal Power Corporation Ltd (OTPCL), an Odisha government PSU, has apparently walked into a blind alley with no suitable coal block in sight.

The Ministry of Coal (MoC) had originally allocated the Tentuloi coal block in favour of OTPCL with reserves of 1,200 million tonne. But Tentuloi being an underground block was tough to extract and posed the risk of escalating the cost of power production. The Odisha government has been making repeated pleas to the ministry to allocate an alternative block. The state government had even offered to surrender the Tentuloi block so that OTPCL becomes eligible for a new coal block under the PSU dispensation route.

"The Coal ministry had offered two alternative blocks to meet OTPCL's requirement. But, even those blocks have high stripping ratios that would make coal extraction difficult and expensive. Now, the ministry is hesitant to award any other block", said a state government official.

Responding to the state government's request, a committee was constituted by Coal India arm Central Mine Planning & Design Institute (CMPDI). The committee after examining the geo-mining information of the Tentuloi block concluded that there are some adverse mining issues in the coal block compared to OTPCL's requirement.

Keeping in view the committee's recommendations, the MoC examined the feasibility of allotment of Kardabahal and Brahmanbil coal blocks to OTPCL. However, both these coal blocks with high stripping ratios constrained their suitability for open cast mining.

OPTCL is a 50:50 joint venture (JV) between Odisha Mining Corporation (OMC) and Odisha Hydro Power Corporation (OHPC). is setting up a 2400 Mw coal-fired power plant at an estimated cost of Rs 17,000 crore. The power station has been proposed at Kamakhyanagar in Dhekanal district.

The project needs 1767.90 acres of land, including 1074.95 acres of private land, 684.25 acres government land and 8.7 acres forest land. The power purchase agreement (PPA) for sale of entire power to be generated by the OTPCL power station has been executed with Gridco, the state owned power trading firm.

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