With the earth-shattering verdict of the Supreme Court declaring all the decisions by the Government to allocate coal blocks to companies since 1993 arbitrary and thus illegal, the mood among the corporate majors of Jharkhand is not so sombre. Many see the decision as course correction which would segregate serious players from non-serious ones and speed up the matter to the benefit of the investors.
The verdict, which would become clearer in its next hearing slated for September 1 when the apex court decides on scrapping of the coal blocks allocations in question, is like a make or break situation for the major power companies in the country besides iron and steel and others.
Around 24 power generation companies have signed MoUs with the Jharkhand Government to set up their plants and have been allocated coal blocks in the different areas of the State that owns the largest black fuel reserve of 80716 mt of the country.
“The sense prevailing is that the Supreme Court would treat cases of serious and non-serious players on different footings. We have done significant investment on grounds. We will present our case before the court and also expect the Central Government to support us as they know very well who the serious players are,” said lt Col (Retd) Samit Kumar Saha, General Manager (Corporate Affairs) on Jindal Steel and Power limited.
It is estimated that all the power generating companies together have potential to produce over 20,000 MW of electricity in Jharkhand with investment crossing Rs 1,15,344 crore. This would have generated about 55,000 employment opportunities in construction stage and 16,000 at generation stage through direct and indirect means.
Nevertheless, there are nearly eight companies including Abhijeet, Essar Power, Tata Power, Adhunik Power & Natural Resources limited, JSPl, Inlando, Reliance Power and Maithon Power that have made considerable investment on ground without much progress.
“As per the agreement signed we had to invest at least 25 per cent of the total investment. Present estimate is that the company has put not less than 40 per cent of the actual cost. It was the duty of the Government to facilitate us with all the necessary clearances in place. The company is not at any fault but its investment in the tune of Rs2,500-3,000 crore is stuck,” said a top official of Essar Power.
Similar is the case with Adhunik which has fired its 270 MW capacity unit at Saraikela Kharsawan without local coal supply and instead importing the fuel from Indonesia incurring huge losses. “The company is also sharing power with Jharkhand and that also at the cost of Rs1.20 per unit whereas the cost is Rs1.60. It is bearing losses in the hope that one day it all would be over,” said an official of the company.
Nevertheless some ‘rouge’ companies have to bear the brunt as well. Due to its involvement in scam related to block allocation one power company having plant at Chandwa of latehar at the investment of over Rs8,000 crore has been stripped Chitarpur coal block.
“There is no doubt that irregularities have been there. The industry also wants to shed the bad name it has gathered. This is a good opportunity and we hope that the SC would take all the factors into consideration before pronouncing any judgment,” said another power project official.