Naveen demands fixing of coal royalty on ad-valorem basis

Seeks lifting of 'no-go' status for coal blocks alloted to OPGC

Reiterating Orissa's earlier demand for doing away with the existing system for calculation of coal royalty, the state Chief Minister Naveen Patnaik today urged the Coal Ministry to put in place a new system for assessing coal royalty on ad-valorem basis at 20 per cent of the market price.

The demand was made by Patnaik during his meeting with the Coal Minister Sriprakash Jaiswal in New Delhi.

Jaiswal assured the Orissa Chief Minister that the suggestion would be given due importance and a final decision would be taken after consultation with different coal bearing states and other stakeholders.

Earlier on 22 February this year, Patnaik had sought the intervention of Prime Minister Manmohan Singh in this connection. In his letter to Singh, Patnaik had stated that the price on which royalty is charged should relate to the market price of the relevant grade of coal and not to the notified price declared by Coal India Ltd (CIL).

He had also demanded that the state should be entitled to compensation in case of delay in revision of the coal royalty.

Besides, Patnaik during his meeting with the Coal minister demanded Manoharpur and Dip Side of Manoharpur coal blocks allocated to Orissa Power Generation Corporation (OPGC) are extremely vital for state’s future power generation requirements and socio-economic development of western Orissa, and hence, should be classified into "Go" category from “No-Go” category.

Jaiswal assured Patnaik that his ministry was in favour of this move and would take necessary steps for the same.

It may be noted that MoEF in a recent move had proposed to categorize the Meenakshi group of coal blocks allocated to the Ultra Mega Power Project (UMPP) proposed at Sundergarh from 'No Go' to 'Go' area under the condition that the Ministry of Power (MoP) would give up opening up of Manoharpur and Dulinga coal blocks allocated to OPGC and National Thermal Power Corporation (NTPC) respectively.

Consequently, Patnaik had written to the Prime Minister, stating that it would not be fair on the part of MoP to accept such a move at the cost of two other projects, particularly when OPGC is the only state owned project.

Moreover, Patnaik has pointed out that the allocation of coal blocks by the Coal ministry needs to be guided by a well thought out approach, keeping in view the concerns of large scale acquisition, human displacement and environment.

He suggested that a high-level committee with one of the representatives of the state government as a member should review the coal block allocation. Patnaik also suggested that a Zonal Office of the Coal Controller’s Organization should be established in the state to which the Coal minister has assured prompt action.