Adani, Torrent get equal share in GMDC's Naini coal block in Orissa

The Gujarat government has allotted Gujarat Mineral Development Corporation's (GMDC) Naini coal block in Orissa, to Adani and Torrent groups, a top company official said.

Both the Guajarat-based companies will have 50 per cent share each in the block, which was awarded to the state-run GMDC by the government of India in 2006. The state government has accomodated Adani group, which was refused to be given fuel by the GMDC earlier on account of higher price of power.

"Chief Minister Narendra Modi has cleared the file splitting the entire block between Torrent group and Adani group," said a top official in the state industry department. He added that finally, a long-pending issue involving three corporates engaged in energy generation and distribution, has been resolved. The state government has not approved GMDC's prior agreement with Hyderabad-based KSK Energy, which had signed an pact with GMDC to develop the block and set up a power plant on the pit head.

GMDC was alloted two coal blocks, Morga in Chhatisgarh and Naini in Orrisa, in 2006.

Having procured the block in Morga, GMDC had signed a Fuel Supply Agreement (FSA) with KSK Energy for setting up a power plant of 1,750 MW at the pit head. Under the agreement, GMDC will supply fuel to KSK, which would set up a power plant of 1,750 MW and sell power to GMDC, which in turn would sell power to Gujarat Urja Vikas Nigam (GUVNL). Subsequently, another block was alloted in Naini in Orissa. GMDC had signed an FSA with KSK for fuel supply and power generation.

The Adani group had signed a Power Purchase Agreement (PPA) with GUVNL for fuel supply for 1,000 MW for 25 years at Rs 2.35 per unit. However, CJ Jose, managing director of GMDC, had refused to provide fuel to the Adani group contending that its price was higher than what KSK had agreed to in the FSA.

Now, the state government has approved the KSK's FSA for the Morga block while the Naini block has been given to Torrent and Adani, thus cancelling the GMDC's FSA with KSK for that block.

"As per the tender, GMDC had an agreement to supply fuel for 1,000 MW power to Torrent group from Morga block. However, now it will be supplied fuel around 875 MW from Naini block," said a senior official who was dealing with the issue.