Coal GoM to fast-track 8 projects, big firms to gain

The group of ministers (GoM) on coal, headed by finance minister Pranab Mukherjee, decided at its third meeting today to speed up clearances for eight critical infrastructure projects on a priority basis.

The eight projects, which will get priority treatment for clearance of coal blocks attached to them, belong to top corporate houses, including Adani, Reliance, Aditya Birla Group and Essar.

“Investments running in thousands of crores have already been made in these projects. This was the main decision of the GoM in today’s meeting,” said a senior official close to the development. The decision was in line with the recommendations of a committee appointed by Prime Minister Manmohan Singh earlier to take up these eight power sector projects on a priority basis.

“While some investments have been made in these blocks, a majority of the investments has been in the end-use projects,” the official said. To take a final call on the fast-tracking of the clearance process for stranded projects, the GoM decided to meet for the fourth time on July 2.

The Adani Group has sought forest clearance for Lohra West and Lohra Extension blocks to set up a power plant of 3,300 Mw at Tiroda in Maharashtra. It has already invested around Rs 7,000 crore in land acquisition and placed orders for equipment. It has also signed a power purchase agreement with the Maharashtra government.

The Aditya Birla Group has sought faster forest clearance for the Mahan coal block, jointly allocated to Hindalco, its flagship company, and Essar Power. While Essar is developing an independent power project, Hindalco is building a captive power plant. The block falls in the no-go area, and substantial investments have already been made. In fact, the end-use projects are ready for commissioning.

Another coal block the GoM decided to recommend for faster clearance, is Chhatrasal, linked to the 4,000-Mw Sasan ultra mega power project (UMPP), being set up by Reliance Power. The project requires an investment of close to Rs 20,000 crore. It is scheduled to start generation by January 2013. The concept of no-go area for forest clearance did not exist when the government had invited international bids for the Sasan UMPP in 2006. The 12-member panel was set up this January after the environment ministry’s no-go policy barred mining in heavily forested areas.

According to the coal ministry, 203 coal blocks, linked to power projects, with a production capacity of 130,000 Mw, have been stuck in no-go areas. Overall, investments worth Rs 40,000 crore have already been made in end-use projects in the power, steel and cement sectors, which have links with captive blocks in the no-go areas.

The panel’s other members include Coal Minister Sri Prakash Jaiswal, Power Minister Sushilkumar Shinde, Steel Minister B P Verma, Road Transport Minister C P Joshi, Law Minister Veerappa Moily, Mines Minister Dinsha Patel, Home Minister P Chidambaram, Agriculture Minister Sharad Pawar, Commerce and Industry Minister Anand Sharma and Planning Commission Deputy Chairman Montek Singh Ahluwalia.