Explained: Why coal blocks allotted to PSUs face delay

Coal

Indian Market
by 5paisa Research Team Last Updated: 2022-09-19T15:59:47+05:30

In what will not augur well for the country’s precarious power situation, as many as half the coal blocks awarded to public sector power enterprises have been facing delays, even seven years after they were sanctioned the blocks. 

According to a report by the IANS, seven out of the total 16 coal blocks issued to state-owned power sector entities, or PSUs, are yet to start or have just started production, even more than seven years after their allotment.

Which PSUs were issued these coal blocks?

Seven out of the total 16 coal blocks issued to state-owned power sector entities or PSUs like NTPC, Damodar Valley Corporation (DVC), Neyveli Lignite Corporation (NLC), Tehri Hydro Development Corp and Patratu Vidyut Utpadan Nigam Ltd (PVUNL - a joint venture between NTPC and JBVNL) are yet to start or have just started production, the report said. 

This is despite the fact that coal blocks were allotted to these power sector PSUs back in March 2015 to fulfil their shortage of dry fuel, as India's largest coal producer, Coal India Ltd (CIL), on its own, could not completely meet their requirements.

But what are the reasons for delay?

Reasons like delay in land acquisition, environment and forest clearances, non-availability of land records as well as law and order issues are the main reasons behind lack of work in these coal blocks.

Of the original 16 coal blocks allotted to these entities, only five have reached production stage, while three have been marked for surrender and one was surrendered last month. In the remaining seven blocks, work on coal excavation is yet to begin or has just begun.

What is the detailed status on each of the delayed blocks?

Out of these seven reserves, four blocks belong to NTPC and PVUNL (NTPC's joint venture with the Jharkhand Bijli Vitran Nigam Ltd or JBVNL) while the other three coal reserves belong to the DVC, the NLC, and the THDC.

The DVC had two blocks, out of which it surrendered Khagra Joydev coal block situated in West Bengal last month, as land acquisition could not be done.

As far as the status of these seven blocks is concerned, Power Ministry sources said that production work in NTPC's Chatti Bariatu coal block in Jharkhand has only begun in April, while its Kerandari block (Jharkhand) is expected to become operational by the end of this fiscal.

However its third reserve Banhardih (also in Jharkhand and owned by its joint venture PVUNL) is likely to become operational only by 2024-25, as both forest and environmental clearances are awaited.

The NTPC's fourth coal block Badam (yet again in Jharkhand) will begin work in 2023-24 as transfer of mining lease as well as stage two of forest clearance is awaited.

The DVC's Tubed coal block is also expected to begin operation by end of this financial year, sources informed, as its forest clearance is expected shortly.

The NLC's Pachwara South coal reserve in Jharkhand is expected to start production work next year in 2023-24 as environmental and forest clearances are awaited.

The THDC's Amelia block in West Bengal is likely to begin work during this fiscal itself as appointment of mine developer and operator is underway.

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