Coal ministry blow to Odisha's demand for coal blocks

The Ministry of Coal has turned down the state government's demand for allocation of Chhendipada and Chhendipada II coal blocks in favour of its PSU - Odisha Thermal Power Corporation Ltd (OTPCL).

With the ministry no longer keen to award more blocks to state PSUs under the nomination route, OTPCL will be left with no option but to participate in bidding to win a coal block.

"The ministry has not honoured our request for allocating Chhendipada and Chhendipada II coal blocks to OTPCL. The letter from the ministry has made it amply clear that they are not going to award any more coal block to PSUs under the nomination route. Now, we have to take a call on whether OTPCL would take the auction route to get a coal block," said Pranab Prakash Das, state energy minister.

At the meeting of state power ministers held in Guwahati last month, Das made a strong plea to award Chhendipada and Chhendipada II coal blocks to OTPCL. Out of eight coal blocks identified in Odisha for allotment to PSUs, only two- Manoharpur and dip side Manoharpur coal blocks have been given to a state PSU, Odisha Coal & Power Ltd (OCPL), the minister pointed out. Earlier this month, Odisha chief secretary G C Pati had written to the Ministry of Coal to allocate Chhendipada and Chhendipada II coal blocks to OTPCL.

The state government justified the demand stating that OTPCL was a 100 per cent government owned company being a 50:50 joint venture between Odisha Mining Corporation (OMC) and Odisha Hydro Power Corporation (OHPC). Previously, the Ministry of Coal had given Tentuloi coal block to OTPCL with deposits of 1,234 million tonne. But the coal block was not commercially viable. Being an underground mine, it was very difficult to excavate coal there. Most of the reserve is below 900 metre depth. Even with the use of best technologies, only two million tonne of coal was expected to be extracted from this mine while OTPCL's requirement for the power project was 16 million tonne per annum (mtpa).

OTPCL is setting up a 2,400 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 1,767.90 acres of land, including 1,074.95 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 generated at this project to Gridco has been executed.