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Centre rejects Modi's demands for coal blocks

Guj CM had written a series of letters to PM since June 2010 seeking additional coal blocks for Guj Mineral Dev Corp

Sudheer Pal Singh & Gyan Varma  |  New Delhi 

The Centre has turned down Gujarat government requests for coal blocks. Gujarat Chief Minister Narendra Modi had written a series of letters to Prime Minister Manmohan Singh since June 2010 seeking additional coal blocks for Gujarat Mineral Development Corporation (GMDC) and allocation of an alternate coal block for the state-run company.

Taking a call on the request forwarded by the PMO, coal minister Sri Prakash Jaiswal opened up Gujarat’s past track-record of coal block development. In a recent reply to Modi, Jaiswal pointed out four coal and six lignite acreages that already stand allocated to the state. “None of the above mentioned (four) coal blocks have come into production so far,” he said.

In response to queries, a senior Gujarat government official, however, told Business Standard that five lignite blocks have already come into production and another is scheduled to start operation in April this year. On delay in the two coal blocks – Morga II in Chhattisgarh and Naini in Odisha, he said, “The environment ministry (MoEF) in June 2010 conveyed rejection of application of GMDC for Prospective License (PL) due to area falling in forest land which is No-Go area. However, in January 2012, it was conveyed that as Go and No-Go concept is dispensed, GMDC will have to pursue Forest Clearance with the state’s forest department. MoEF’s approval is awaited.”

The state government also attributed the delay in development of Naini block to the Odisha government’s refusal to give PL. Later, in October last year, the centre cancelled the allocation of the block on grounds of “negligible progress” and invoked a half, Rs 32.5 crore, of the total bank guarantee submitted. “There has been no delay in development of the block on the part of GMDC or state of Gujarat but the delay has been mainly due to non-receipt of PL clearance from the State of Odisha,” Gujarat government said.


Jaiswal had also said in his letter that, in order to allocate blocks under the government company dispensation, his ministry circulates a list of blocks to state governments inviting applications. Block allocation is considered based on the relative merits of the applicant states. “At present, no coal or lignite block has been offered for allocation. The process of identification of blocks has been initiated. GMDC may apply accordingly as and when identification is complete,” Jaiswal said.

Much after the exchange of letters, the coal ministry last month circulated a list of 17 blocks with 8.5 billion tonne (BT) reserves to be allocated to government companies under the Auction by Competitive Bidding of Coal Mines Rules.

Modi had also sought an alternate coal block Bhalumuda in lieu of Morga II block allocated to GMDC. Jaiswal, in his reply, said there is no policy for allocation of alternate blocks. “Hence, the request cannot be considered,” he said.

Gujarat is among the few low power deficit states in India. The state has been requesting the centre since 2007 for higher coal linkage from Coal India subsidiary Western Coalfields Ltd (WCL). Currently, it transports coal from the eastern coal belt which leads to additional financial burden from freight outgo and costly imports to the tune of Rs 440 crore annually.

Gujarat State Electricity Corporation Ltd (GSECL), the state-owned power generator, has a total coal-based power capacity of over 3,400 Mw contributed by four power stations. The stations consume 200 lakh tonne coal every year. Against this requirement, GSECL has linkage of 164 lakh tonne from South Eastern Coalfields (SECL) and only 9.3 lakh tonne from WCL. To meet the shortfall, the state has to import 15 lakh tonne coal annually.

First Published: Sun, February 03 2013. 15:31 IST
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