Orissa still indecisive on coal transport by GMDC

Even as the Gujarat Mineral Development Corporation Ltd (GMDC) has intensified its efforts to transport coal from the Naini coal block in Orissa to end-use power plants of Adani Enterprise Ltd and Torrent Power Ltd in Gujarat, the Orissa government is yet to take any decision on the matter.

GMDC has approached the Ministry of Coal (MoC) for ferrying coal and the ministry has sought the comments of the state government in this connection. With the state government still indecisive on the issue, the ministry in a recent communication with the state government, has asked for the latter's comments on an urgent basis.

"GMDC had originally evinced interest in setting up a 1500 MW power plant in Angul district but now they are keen on transporting coal to Gujarat. The coal ministry has sought our comments but we are yet to take any decision on the issue”, said a top official of the state steel & mines department.

It may be noted that the Naini coal block under Talcher Coalfields under the command area of Mahanadi Coalfields Ltd (MCL) was allocated jointly to GMDC and Puducherry Industrial Promotion Development & Investment Corporation (PIPDIC) Ltd for setting up power plants. While GMDC had proposed to set up 1500 MW power plant in Angul district, PIPDIC Ltd was to set up 1800-2000 MW power plant an undecided location in the state.

However, sources at the state energy department stated GMDC had not submitted any proposal for setting up the power plant.

Industry observers have, however, objected to the move, stating that the move to transport coal would not be in the interest of the state. They have pointed out that carrying coal out of Orissa to cater to the industrial requirement of Gujarat would deprive the host state of value creation and economic benefits.

Besides the coal needs to be transported over 2000 km which will push up cost of coal by nearly Rs 2000 per tonne, resulting in an additional power generation cost of Rs two per unit. Moreover, with MCL having coal stockpile of over 50 million tonnes of coal at its mines due to shortfall of rakes, transportation of additional coal from the state does not seem a workable proposition as it would put needless strain on rail infrastructure.