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State scraps coal block pact, eyes new deal

Ranchi, Jan. 17: Jharkhand State Electricity Board (JSEB) has terminated a “controversial” agreement with Bengal-based EMTA Group, to enable it to look for a new firm for extracting coal from Banhardih block in Latehar.

A JSEB notice stated that the agreement dated February 15, 2003, for a joint venture between the state power utility and EMTA had been terminated, vide office order No. 24 dated January 6, 2014.

“The agreement with EMTA was lopsided,” JSEB chairman S.N. Verma told The Telegraph , while confirming the termination of the MoU.

He added that the decision was made after taking a view from the Union coal ministry.

The Banhardi coal block, which was at the centre of the deal, is dedicated to Patratu Thermal Power Station (PTPS), whose expansion is on the cards.

“A super thermal power plant has been proposed at Patratu, Ramgarh. It will be set up under a joint venture between JSEB and a prospective private partner. The things are at RFQ (Request For Qualification) stage. EMTA Group can also participate in fresh bidding, if it wishes,” Verma said.

The Arjun Munda government had raised objections to the agreement signed between Bengal EMTA Coal Mines Limited (BEMCL) and the Babulal Marandi government in 2003 for mining in coal blocks allotted to JSEB.

The Munda government questioned the legal sanctity of the 2003 agreement — it gave mining rights to BEMCL with a majority stake of 74 per cent, leaving only a meager 26 per cent with state — and suspected that the private company was unduly favoured.

Moreover, the government and JSEB wanted to rope in a private partner for setting up a super thermal power plant in vacant land of Patratu and the state invited prospective bidders for the proposed project in 2010.

As many as 35 companies had pitched for the proposed Patratu power plant, encouraged by the fact that sourcing coal would not be a problem since the Banhardih block had been allotted to JSEB.

But, the state government failed to launch the project in view of BEMCL’s opposition.

In 2011, Attorney General G.E. Vahanvati upheld the joint venture between JSEB and BEMCL, which had challenged the government’s bid to look for other companies citing its agreement with the power board in 2003.

Now, with JSEB scrapping the BEMCL agreement, the state can join hands with a new partner for the proposed 1,320-1,980MW plant in Patratu to be set up on a public-private partnership model.