Naveen Patnaik

Bhubaneswar, Sept. 17: Odisha’s ambition to become a power-surplus state in the next four years is unlikely to be fulfilled as some of the coal-based power projects have come under CBI scrutiny because of their coal-block linkages.

The Inter-Ministerial Group on coal is also looking into allotment of coal blocks to various companies.

Between 2006 and 2011, the state forged MoUs with 29 independent power producers to set up coal-fired thermal power projects in the state with the aim of generating 37,340MW. The state was to receive 12,475MW from these plants. “The fate of all power projects depends on assured supply of coal linkages,” an official said.

“Of the 29 projects, only Sterlite Energy has completed its project and Aarti Steel Limited has completed only 50MW unit out of the total proposed 1370MW capacity,” said an energy department official.

So far, three major companies — Jindal Steel and Power Limited (JSPL), Bhusan Energy Limited, a group of Bhusan Steel and Navbharat Power Limited — are now embroiled in the controversy over the coal block allotment. “With the CBI probing into the matter, we cannot rule out the possibility of other coal block allotments coming under its purview,” said a government official.

The Odisha government has been accused of showing undue favour to JSPL by recommending a coal block in its favour. Chief minister Naveen Patnaik had written to the Centre to cancel the coal block allotted to a Tamil Nadu-based project and award it to JSPL.

JSPL is to set up a 1320MW unit in Angul. The MoU was signed with the Odisha government on February 7, 2009. The Congress is now demanding that the CBI look into the stand of the Odisha government vis-à-vis JSPL.

The CBI has already lodged an FIR against Hyderabad-based Navbharat Power Limited for selling its project and the allotted coal block to Essar Power Limited. As per the MoU signed between the company and the state government, it was to set up a power plant at Meramundali in Angul district with an initial generation capacity of 1050MW. The project was likely to cost of Rs 6,000 crore.

On the other hand, the Inter-Ministerial Group on coal blocks has recommended cancellation of coal blocks to Bhusan Steel. It was allotted new Patrapara block in Odisha in January 2006. The block has extractable reserve of 316.09 million tonnes. Bhushan Energy, a subsidiary of Bhushan Steel, is to set up a power plant in Angul to produce 2,000MW.

Officials pointed out that all the power projects were already running behind schedule because of land acquisition problems. The coal allotment controversy would compound their woes further.

Odisha energy minister Arun Sahu said: “The state is likely to feel the heat. As setting up a hydro-power project requires a lot of time and effort, the Odisha government has decided to promote coal-based power projects. However, a standstill situation has come up after the Coalgate scam surfaced and CBI started a probe into it.”

“We are going to call a meeting shortly to assess the situation,” he added.

Former law minister Narasingh Mishra said: “A number of loopholes have come up because the state government hurriedly signed the MoUs. It should be examined.”

In a related development, the Inter-Ministerial Group, which met in New Delhi today, is scrutinising 29 out of 58 cases of coal allotment to companies that were served show-cause notices for non-development of mines during the prescribed time frame.

The Union government also gave its nod to the Inter-Ministerial Group recommendation for submitting bank guarantee by Monnet Ispat & Energy for Utkal B2 Block in Odisha allocated in 1999. The Inter-Ministerial Group has recommended deduction of bank guarantee of the coal blocks allotted in Jharkhand to Hindalco and Tata Power in 2007. Incidentally, Tata Power is also planning a project at Naraja in Cuttack district.

“We had recommended 47 cases for allotment of coal blocks of which only 15 were accepted by the Centre,” said steel and mines minister Rajani Kant Singh.