Threat of losing coal block allocation has rejuvenated power companies, which have been sitting on allocated coal blocks for several years.
For example, allocatees of the Mandakini B coal block in Orissa have started tendering for the development of the associated power plant after the inter-ministerial group (IMG) recommended cancellation of the allocation in its meeting on November 7. The panel made the recommendation on the ground that there was an undue delay in development of the block by the allocatees. The block was jointly allocated to states of Meghalaya, Assam and Tamil Nadu in 2007 for meeting fuel requirement of a 1,320-1,600 MW power plant.
In their haste to wrap up bidding quickly, allocatees also dispensed with the mandatory requirement of assessing technical capability of interested bidders and straightaway invited financial bids. Moreover, while the national tariff policy stipulates minimum 45 days from the date of issue of request for proposal for submission of bids, the allocatees have to decided to complete the process in just twelve days. But their haste does not seem warranted, given that the associated coal block will need seven years to develop. Unless coal is available from the block, the power plant cannot be run.
The coal ministry has issued show-cause notice to some 58 private and public sector coal block allocatees, asking them to explain the reported delay in undertaking development block. The IMG, constituted by the Centre, has recommended de-allocation of over a dozen captive coal blocks during its ongoing review. Coal minister Sriprakash Jaiswal has ruled out the possibility of restoring allocation of deallocated coal blocks.
