Sanjiv Goenka-controlled power utility CESC may lose its Mahuagiri coal block in Jharkhand, which was allotted to it in 2007 and is scheduled to be put to use in 2016 when its 1,260 MW thermal power project at Dumka in Jharkhand is ready.
CESC?s Mahuagiri block is among the 29 allocated coal blocks under the scanner of the inter-ministerial group (IMG) set up by the government. IMG, which recommended deallocation of eight coal blocks till September 18, is reviewing the status of other allocated blocks. Mahuagiri and North Dhadu coal blocks (allotted to Electrosteel and Adhunik Alloys) will be looked at next, an official in the Coal Controllers office in Kolkata told FE.
IMG has been gathering the status report of various blocks through the Coal Controllers? office.
CESC officials feared that if the Mahuagiri coal block is deallocated, the company will not be able to move ahead with its pithead power project.
CESC and JAS infrastructure, a part of the Abhijeet Group, was allotted the coal block in 2007. It was handed out as a captive block to CESC for supply of coal to the Dumka power plant whose construction work got delayed due to land acquisition problems.
The block, with an estimated reserve of 700 million tonne, is situated 25 km from the project site and CESC proposed to set up a pithead power plant with an estimated investment of R5,000 crore.
CESC, currently generating 1,225 MW with plans to become a 7,000 MW company in another five years, had planned to set up two units totalling 660 MW in the first phase on 350 acres and another 660 MW in the second phase.
A CESC official said the company got all necessary clearances for the project last August and had set a deadline of commissioning the plant in 2016. It was currently in the process of acquiring land. CESC didn?t develop the block because the project wasn?t ready, the official said.
?The coal from the block is meant for captive use… What will the company do with the coal if the project itself is not ready,? the official said.
However, an official in the Coal Controller?s office said the Mahuagiri block has coal in its upper seams. He said that there are a number of illegal pits around the block and a huge amount of coal is transported illegally from the area. The block also doesn?t fall under the forest area and so there was no hurdle in developing the block, the official said.
While CESC officials argued that there was no reason to develop the block at an early stage and that it was also facing huge resistance from local illegal miners in developing the block, fingers are being pointed at the ministry on why was the block allocated so early in 2007 when the coal would not be in used before 2016. CESC had started lobbying for the block as early as 2005.
