Tuesday, Oct 21, 2014

Development of 8 NTPC coal blocks gets delayed

New Delhi | Posted: September 4, 2014 5:53 am

While eight captive coal blocks were allotted to NTPC between 2004 and 2007 through what is called the ‘government dispensation route,’ the state-run company is running way behind schedule in their development. Although it blames “issues beyond its control”, such as lack of support from respective state governments and delays in fixing land compensation, analysts also attribute the failure to inefficiency at the company level.

Even if the PSU tries hard now, the benefit of the government’s proposal to the Supreme Court — exempting mines that are likely to start production over the next six months — is possible for just two blocks, say industry watchers.

Click here for graph

While agreeing to cancellation of all extant blocks, among the 218 termed illegal by the Supreme Court, the government last week sought indulgence to exempt some 46 of them — 40 where production has commenced and six where it may start in 2-6 months. For NTPC, this means that if the court accepts the government’s plea, cancellation can at best be avoided for Pakri-Barwadih (awarded in 2004) and Chatti-Bariatu south (2007).

In Pakri-Barwadih block, production was slated to begin in December 2013, but that didn’t happen.

“We are trying our level best to operationalise the captive mines, but some things are beyond our control. We still hope that some blocks could be brought under production before the end of the current fiscal,” said an NTPC official, asking not to be named.

Of the eight blocks allocated to the PSU, two — Bhahmini and Chichro Pastimal — were de-allocated in June 2011 as they could not make any progress. In fact, three other blocks were de-allocated during the period because of non-progress, but the coal ministry returned them to the company later. In the six existing captive blocks with it — Pakri Barwadih, Chatti-Bariatu, Kerandari and Chatti-Bariatu (South) in Jharkhand; the Tallaipali mines in Chhattisgarh and Dulanga mines in Odisha — NTPC has so far invested close to Rs 1,800 crore. The total geological reserves of these mines is estimated at 3,732 million tonnes (mt) while mineable reserves are 2,035 mt. These blocks have a total production potential of 53 million tonne annually, which will cater to around 10,840 MW of NTPC’s coal-based generation capacity.

Last year, the government allocated another four blocks with 2-billion-tonne reserves to the company.

But progress on NTPC’s mines has remained slow ever since the allotment. Going by the time required to operationalise a coal block (4-5 years), all the captive mines should have been operational by now. “The company remains committed to developing the blocks as fast as possible but support is required from state to address the issue law and order and land compensation formula, so that the blocks are brought under production quickly,” said a senior official of NTPC.

NTPC was hoping to operationalise the Pakri-Barwadih block, already at the advanced stage of development, by December 2013, with annual production capacity of 3 million tonne per annum. But with work at the mine suspended since February 2012, the deadline continued…

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