Sasan UMPP: Cen­tre in a fix over re­turn­ing coal block

ANIL AM­BANI POWER COM­PANY WANTS BLOCK BACK, BUT NO PRO­VI­SION IN THE LAW

Resource Digest - - CONTENT -

Tak­ing back the Ch­ha­trasal coal block from Anil Am­bani Group’s ul­tra mega power pro­ject Sasan Power Ltd has opened a Pandora’s Box for the govern­ment. While the Coal Bear­ing Ar­eas (Ac­qui­si­tion and De­vel­op­ment) Act al­lows the govern­ment to take back the acreage, it is silent on re­turn­ing the same to the con­trac­tor, if and when is­sues are re­solved.

“Even if we want to re­turn it, we can­not do so as the Act does not pro­vide for it. Re­turn­ing will re­quire amend­ing the Act,” a se­nior govern­ment of­fi­cial said.

The Sasan is­sue has com­pelled the govern­ment to look at a way out for sim­i­lar cases in the fu­ture. The Min­istry is cur­rently seek­ing le­gal opin­ion on a pos­si­ble so­lu­tion for re­turn­ing the blocks to the con­trac­tors in case they are found to be not erring.

The Anil Am­bani Group com­pany has taken the Coal Min­istry to court on the is­sue af­ter its at­tempts to con­vince the lat­ter to re­con­sider its de­ci­sion of de-al­lo­cat­ing the Ch­ha­trasal block given to the UMPP met with lit­tle suc­cess.

In May 2015, the Min­istry had de-al­lo­cated the block, as the coal mined was be­ing di­verted to the Group’s Chi­trangi power plant ac­cord­ing to a di­rec­tive from the pre­vi­ous UPA govern­ment. The Coal Min­istry’s de­ci­sion to de-al­lo­cate Ch­ha­trasal was a fol­low up to the Supreme Court’s de­ci­sion in Septem­ber 2014 which can­celled 204 coal block al­lo­ca­tions and al­lowed ul­tra mega power plants to keep their coal blocks, but pre­vented any di­ver­sion of fuel from such acreages.

The de­ci­sion of the Coal Min­istry was chal­lenged in the Delhi High Court by Re­liance Power, par­ent com­pany of Sasan Power Ltd, in July 2015.

Sec­tions 10, 11 and 12 of the Coal Bear­ing Ar­eas (Ac­qui­si­tion and De­vel­op­ment) Act which re­lates to the rights of land bear­ing coal, stip­u­lates that the Cen­tral govern­ment will hold the sole right over such land. As re­gards trans­fer of land, the Act just pro­vides that the govern­ment can only hand it over to a State-owned com­pany.

In June 2015, the Min­istry fur­ther di­rected Re­liance Power to re­strict min­ing from Mo­her and Mo­her Am­lohri Extn to 16 mil­lion tonnes an­nu­ally as against the 20 mil­lion tonnes a year. Re­liance Power has main­tained that it needs to op­er­ate the Mo­her and Mo­her Am­lohri Extn at 20 mil­lion tonnes per an­num to meet Sasan’s re­quire­ments.

The com­pany, in its sub­mis­sion to the Delhi High Court, has said that it is un­able to meet coal re­quire­ments at Sasan and needs to op­er­ate the Mo­her and Mo­her Am­lohri Extn blocks at 19 mil­lion tonnes.

By rough es­ti­mates, 1 unit of elec­tric­ity pro­duc­tion re­quires 1.05 pounds of coal which would mean to op­er­ate at full ca­pac­ity the 4,000 MW, the Sasan ul­tra mega power plant will re­quire 16.68 mil­lion tonnes of coal. How­ever, this would vary on the qual­ity of coal and the heat gen­er­ated by

THE SASAN IS­SUE HAS

COM­PELLED THE GOVERN­MENT TO LOOK AT A WAY OUT FOR SIM­I­LAR CASES IN THE FU­TURE

burn­ing that coal.

“We cur­rently take out 16 mil­lion tonnes per an­num and that is our re­quire­ment. But one can­not be sure of the qual­ity of coal go­ing for­ward there­fore we want per­mis­sion for 20 mil­lion tonnes to keep it as a re­serve,” a Re­liance Power of­fi­cial had ear­lier said.

The Min­istry is cur­rently seek­ing le­gal opin­ion on a pos­si­ble so­lu­tion for re­turn­ing the blocks to the con­trac­tors in case they are found to be not erring.

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