We fulfilled net worth criteria for coal-to-liquid project: JSPL

Jindal Steel and Power (JSPL) today said it fulfilled the net worth criteria required for allotment of a coal block for turning coal into oil in 2008.

The Naveen Jindal-led firm was awarded Ramchandi coal block in Odisha, having a geological reserve of 1.5 billion tonnes, to develop coal-to-liquid (CTL) project in 2009.

"The company like to mention that JSPL applied for the block under consortium with 3 other group companies and total aggregate net worth for FY 2008 of consortium was Rs 5,390 crore which is as per guidelines issued by Ministry of Coal, Government of India, for CTL blocks," it said in a filing to the BSE.

It, however, did not disclose the names of the other three firms.

The Naveen Jindal-led firm has been in news ever since the government began scrutinising coal blocks allocated to private sector companies since 1999.

The Ramchandi coal block, awarded to the company in 2009 for the CTL project, is also among the blocks that have been talked about.

National auditor CAG, while computing undue benefit of Rs 1.86 lakh crore being extended to the private firms in its recent report, had also listed the Ramchandi block.

According to the guidelines, issued by the government in June 2008 for developing the CTL projects, the potential developers should have had a net worth of Rs 4,000 crore or above at that time.

The government had estimated Rs 40,000 crore to Rs 50,000 crore investment for development of CTL projects and 22 firms, including JSPL, had made presentations for the project.

In October, 2008, an inter-ministerial group (IMG), headed by Kirit Parikh, then Member (Energy), Planning Commission, had selected JSPL and Tata-Sasol for developing CTL projects.

The IMG had recommended to allocate Ramchandi block to JSPL and its group firms and North of Arkhapal block to Tata-Sasol venture. The final letters to award the blocks were issued to the two consortia on February 27, 2009 by the government.

Both the coal blocks have an estimated geological reserves of 1.5 billion tonnes each.