Odisha seeks coal blocks exclusively for its PSUs

The demand has been made by the state under Rule 4 of draft T&Cs of 'Auction by Competitive Bidding of Coal Mines 2012'

After drawing a barrage of criticism over its recommendations for coal blocks made in favour of private companies, the Odisha government has now sought allocation of coal blocks meant for government companies exclusively for its own PSUs.

The demand has been made by the state government under Rule 4 of draft terms and conditions of 'Auction by Competitive Bidding of Coal Mines-2012' of the Ministry of Coal (MoC).

The state government which has already submitted its comments to MoC has held that the coal required by the industries located outside the state can be met by the resource firms owned by the host state. However, priority will be given to the requirement of coal for industries located or proposed to be set up in the host coal bearing state.

"The area containing coal for allocation to government companies should be identified taking into consideration that such areas should be fairly large in size, having sufficient and good quality coal reserves to enable planning high-capacity coal projects with world-class technology and standards with matching infrastructural facilities so that the needs of the end-use plants can be met on a long-term basis”, Pramod K Panda, additional secretary (steel & mines) wrote to P Soma Shekar Reddy, director, MoC.

Since the allocation of coal blocks for government companies will be considered by an MoC panel, Odisha has pitched for inclusion of a representative from the state government.

For consideration of applications received from the state PSUs, the steel and mines department has stated that the views of the state government need to be taken into consideration. In case the views of the state government are not acceptable to the committee or the MoC either partly or fully, the reasons thereof should be recorded and intimated to the state government before a final decision is taken.

The state government has also prioritized the end users to whom coal will be supplied from the blocks allocated to the state PSUs. The first category includes coal-based power plants of the state and Central government companies as well as independent power producers (IPPs) having long-term power purchase agreements (PPAs) with Grid Corporation of Odisha Ltd (Gridco). Amongst the power generators, priority will be accorded to power plants located in the host state.

The second category includes steel, cement and other specified end users including captive power producers who will get coal at prices to be notified separately. The prices for such consumers will be different from that of the first category.

The third category includes micro, small and medium enterprises (MSMEs) with the last category including non-specified end-users who will be offered coal via the e-auction route.