Uncleared coal blocks trip up power sector
Shrikant / 06 Dec 2011
The govt. had allocated a total of 43 coal blocks beginning from the year 2008. These coal blocks, however, haven’t started production due to issues like environment and forest clearances, land acquisition, etc.
According to the latest article published in the DNA, Coal India is restarting 13 of its coal mines that have a generating capacity of about 200 MT per year. Even though this promises some respite to the power sector, which is facing huge coal shortage, there are as many as 43 coal blocks that were allocated but have not yet been cleared by the government.
According to an Oct 28, 2011 report published on the Government of India's Press Information Bureau, the govt. had allocated a total of 43 coal blocks beginning from the year 2008. These coal blocks, however, haven’t started production due to issues like environment and forest clearances, land acquisition, etc.
The said report lays down that a coal block is supposed to start production within 36 months in case of open cast mines, and 48 months in case of underground mines. This timeline increases by 6 months in case the area is forest land.
It seems a little surprising that large capacity power generation projects have been cleared, but coal blocks haven't. As we expected, 25 companies in this list belong to the power sector. Most of these companies have received coal block allocation in Jan 2008. About 47 months have already elapsed from the allocation till date, and production has not started. A total of 16 coal blocks have been allocated for the power companies, with estimated reserves of about 5327.37 MT. This includes coal blocks such as North of Arkhapal-Srirampur, which has estimated coal reserves of over 3035 MT, and the Ramchandi Promotion Block, which has over 1500 coal reserves, is well connected by road and has a railway station nearby.
We found that due to a delay in 5 open cast (OC) coal blocks, a total of 13 companies are not able to start coal production. All these coal blocks fall in the ‘no go’ zone, as described by the Ministry of Environment & Forests. The 42 month deadline arising due to the forest land has also lapsed in case of these blocks. The list also includes coal blocks that are allocated for UMPPs in Orissa and Chhattisgarh.
Open Cast Coal Blocks Allocated in Jan 2008
| Company Name |
Coal Block |
| Green Infrastructure | Fatehpur East |
| JLD Yavatmal Energy | |
| RKM Powergen | |
| Vandana Vidyut | |
| Visa Power | |
| Jas Infrastructure Capital |
Mahuagarhi |
| Tata Power Company |
Mandakini |
| GMR Energy (IPP) | Rampia & Dip Side of Rampia |
| Lanco Group Ltd (IPP) | |
| Navbharat Power (IPP) | |
| Reliance Energy (IPP) | |
| Sterlite Energy (IPP) | |
| GVK Power (Govindwal Sahib) Ltd | Seregarha |
Source – Press Information bureau, Government of India
The govt. should clear these projects on top priority. Besides, new coal blocks should be allocated after prior clearance from the respective authorities. Given the current high interest rate scenario and coal shortages, companies may not be able to plan new capacity additions, which are urgently required to fuel the economy. However, we believe that the govt. can take smalls steps in this regard, like clearing the coal blocks to boost the growth of power sector.
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