'DNA' investigation: Maharashtra’s 7 coal blocks in deep freeze

Seven coal blocks that had been allocated to the Maharashtra state government in 2006, together accounting for more than 4,000 million tonnes of coal reserves, remain unoperationalised six years later.

While one block was cancelled as it fell within the boundaries of a tiger reserve, the other six – three allocated to Mahagenco, the state’s power distributor which has long complained of coal shortage, and three to Maharashtra State Mining Corporation – are yet to see any mining.

Later this week, the inter-ministerial group will discuss the progress of blocks allocated under the ‘state government dispensation’.

The blocks allocated to the Maharashtra State Mining Corporation (MSMC) buck the coal allocations trend: Auctions were conducted, joint venture (JV) partners paid the government sweat equity. And still, the blocks lie idle, one embroiled in litigation and the other five jostling with environmental clearances, land acquisition and inter-agency wrangling.

The smallest of these is Adkoli in Vidarbha’s Yavatmal district. It is being developed by a JV of MSMC and Sunil Hitech Pvt Ltd that has neither been able to acquire the 300 hectares of land nor get environmental clearances.

Administrative red tape
Managing director of Sunil Hitech, Sunil Gutte, blames administrative delays – bidding ended in August 2008 but an agreement from the state did not emerge until November 2009. The JV company was formed only in 2010 and till then, the MSMC appointed a consultant for a mining plan that had to be discarded later. Even the exploration report by the director general (mining) was not ready until December 2009.

“It took six months to get a nod for transferring the block to the JV company. For the past year, we have been writing letters seeking the collector’s assistance, as mandated by the law, in acquiring the land, but the local body refuses to help,” Gutte said.

A public hearing for the environmental clearance is scheduled for October 10, but Gutte doesn’t expect any progress before February next year.

Gupta Coal India Pvt Ltd, which will develop the Warora block which is with MSMC, has an identical story. Managing director Padmesh Gupta says theirs was an unexplored mine and exploration ended only in June 2011.

“Baba Amte’s Anandvan is located within this block. So we were told to plan for an underground mine,” he said.

The Adkoli block’s mining lease file has been pending with the state for nearly a year, while Warora’s has been pending for five months despite repeated reminders. The Ministry of Coal issued show cause notices to both.

In the case of its largest block, Gare Palma II in Chhattisgarh which has been allocated jointly with the Tamil Nadu Electricity Board (TNEB), the MSMC’s biggest setback was that it called for bids without first incorporating the JV company with the TNEB. “The tender had to be cancelled since MSMC was only a minority stakeholder and called for bids without waiting for TNEB,” said Rachana Dixit, company secretary for Maha Tamil Collieries Ltd, the JV finally incorporated in 2009.

MSMC had nearly awarded the contract to Indiabulls, before the entire process was rolled back. The Mining Developer and Operator is now appointed (Lanco) and “land acquisition and environmental clearances are in process”.

A similar tale
Mahagenco, which was allocated three blocks, has fared no better. While the Bhivkund block in Vidarbha’s Chandrapur district, which was to supply 2.27 million tonnes per annum to meet the requirement of the Aurangabad Power Company Ltd, is now embroiled in a court case. The state’s electricity generator’s JV companies for two blocks in Orissa are still to start operations too.

Mahaguj Collieries, a JV with Gujarat State Electricity Corporation Ltd to develop the Machhakata block in Talcher coalfields in Orissa, will hold a fresh public hearing next month after violence broke out at a hearing last November. “Three thousand hectares of land are to be acquired by Orissa’s Industrial Development Corporation,” said RK Goel, executive director (technical) for Mahaguj. Five Maharashtra and four Gujarat power plants will wait for the 50 million tonnes per annum from Machhakata.

In the case of the Chendipada I and II blocks in Orissa, allocated jointly to the Chhattisgarh Mineral Development Corporation and the state electricity generators of UP and Maharashtra, a show cause notice from the coal ministry issued on May 4 said that the company made no serious efforts to develop the coal block even after repeated assurances and that all important milestones were pending, including the environmental clearances and the mining lease.