Odisha Energy Min for recce of coal blocks before allocation request

Move follows Tentuloi coal block allocation fiasco

Taking a serious note of the recent development over unsuitability of a captive coal block allotted to state-owned Odisha Thermal Power Corporation Ltd (OTPCL), the state energy minister has asked all user agencies to verify the details of coal blocks prior to sending in applications for allocation of the same.

OTPCL, which proposes to set up a 2,400 Mw power plant, was allotted Tentuloi block in Angul district with coal reserve of 1,234 million tonne. But the company later found out that it was an underground block, which may push up the generation cost by 25 per cent due to extra cost to be incurred for coal extraction.

Last week, Chief Minister Naveen Patnaik had written to the Union coal ministry seeking an alternate coal block for OTPCL citing that high cost of mining would make the power project unviable.

The state energy minister indicated that henceforth due care must be taken before applying for coal blocks.

“In future, whenever seeking allocation of any coal block to the state, the Steel & Mines department and user department may collect all available information about the blocks and file application accordingly,” said Arun Kumar Sahoo, minister of state in charge of energy department in a recent order.

The Chief Minister’s Office also supported the order issued by Sahoo.

The Tentuloi block was awarded to OTPCL towards the end of July this year. Though the state government had sought Chandrabila coal block for OTPCL, the Union coal ministry awarded the block to NTPC instead and gave Tentuloi to OTPCL. Coal from Tentuloi could be excavated only after digging 300 metres and this was bound to escalate coal production cost, ultimately impacting power generation expense.

OTPCL is a 50:50 joint venture between Odisha Mining Corporation (OMC) and Odisha Hydro Power Corporation (OHPC). The 2,400 Mw project of OTPCL is proposed at Kamakhyanagar in Dhenkanal district at an estimated cost of Rs 10,000 crore.

The state government has already given administrative approval for acquisition of 1,969.78 acres of land required for the project. OTPCL has also got water allocation for the project.

Entire power generated from the power plant will be procured by Gridco, the state-owned bulk power purchaser, as per the tariff determined through the bidding process.