Rs 372 cr investment in coal-to-liquid projects till date

Promoters of two coal-to-liquid (CTL) projects in Odisha have invested about Rs 372 crore so far in the state.

This was revealed from a written reply submitted by industry minister Niranjan Pujari in the assembly today.

Jindal Synfuels Ltd, incorporated in 2008, has invested Rs 74 crore as of March 2013 while Strategic Energy Technology Systems Ltd (SETSPL), promoted by Tata Steel, has spent about Rs 297.85 crore so far, for infrastructure development, Pujari said.

Jindal Synfuels has plans to set up its plant at Durgapur in Angul district with an investment of nearly Rs 60,000 crore. The fuel making plant will produce 80,000 barrels per day (bpd) equivalent of key oil products such as diesel, naphtha, and LPG.

Similarly, SETSPL has chosen Dhenkanal district for its CTL project at a cost of Rs 45,000 crore. With a production capacity of 80,000 barrels per day, the project promised about 6,400 direct jobs. The company has been set up by Tata Steel in joint venture with South Africa based Sasol Synfuels (Pty) Ltd.

Both the projects, targeted to be commissioned around 2018, require about 3,000-3,500 acre land each for main plant. They would also be requiring additional land for coal mine, beneficiation plant, coal handling plant, water reservoir, power plant and township.

For Tata project, the state government had issued prospecting license (PL) order in March 2012 for north of Arkhapal and Srirampur coal block in Talcher coalfields. Similarly, Jindals have been allocated Ramchandi promotional coal block for their CTL project.

The progress of the two projects hit a roadblock earlier this year as the Odisha government decided to hold up the processing of coal block applications amid an ongoing probe by the Central Bureau of Investigation (CBI).

The CBI has already initiated probe into allocation of the two coal blocks with estimated reserves of over 3,000 million tonne. Earlier, the Parliamentary Standing Committee on steel & coal had questioned the basis of allotment of the two blocks to privately run firms instead of state PSUs.

The two CTL projects, the only of their kind in the country, had not shown appreciable progress either.

Though the state government had prepared the draft memorandum of understanding (MoU) to be signed with Jindal Synfuels Ltd, the pact is yet to be finalised. Recently, it had imposed fresh conditions on the CTL project of Jindal by insisting that the original promoters must retain at least 51 per cent equity in the project till three years of start of commercial operations.

In case of Tata Steel project, though the coal block was allocated to SETSPL in February 2009, major milestones for the coal mine like land acquisition, grant of mining lease, grant of environment management plan clearance and grant of opening permission have not been achieved yet.