*JKSPDC unable to specify time-frame for start of mining
Mohinder Verma
JAMMU, Apr 6: Establishing that issues of immense importance for Jammu and Kashmir don’t get priority attention from all the concerned quarters, the State Government has failed to initiate first step towards obtaining benefit of huge coal block allocated by the Union Coal Ministry nearly four years back. Ironically, nobody in the PDP-BJP Coalition Government is in a position to specify the time-frame for start of mining activities jointly with National Thermal Power Corporation (NTPC).
The coal block in Kundanli-Luburi area of Odisha was allocated to Jammu and Kashmir State Power Development Corporation (JKSPDC) by the Union Coal Ministry in the month of July 2013 for a period of 25 years. This block was allocated on the recommendations of the Inter-Ministerial Committee and under auction by competitive bidding.
This coal block having geological reserve of 130 and 266 Million Tonnes respectively was allocated to JKSPDC by exploration jointly with National Thermal Power Corporation Limited keeping in view lack of experience of JKSPDC and expertise of NTPC in this particular field. Much hype was created over this decision of Union Government as it was for the first time in the history of J&K that any coal block was allocated to State’s key agency in the power sector.
Pursuant to the decision of the Board of Directors, the J&K State Power Development Corporation engaged M/s SBICAPS as consultants to carry out the viability and sensitivity analysis of various options and accordingly advise on the way forward essentially with regard to location of the end use plant, official sources told EXCELSIOR.
The SBICAPS, country’s largest domestic investment bank offering the entire gamut of investment banking and corporate advisory services, furnished a report which states that with a coal availability of 3.40 million tonnes per annum (assuming that extractable coal reserves would be 6070 % of geological reserve of 130 MT for 25 years), the installed capacity works out to 660 MW (supercritical unit).
On the location of the thermal project, the SBICAPS conveyed to JKSPDC that net financial impact by locating the project in J&K vis-a-vis Odisha would be around Rs 700 crore per annum which translates to over Rs 18000 crore over the lifetime of the project, sources informed, adding in this way the consultants explicitly conveyed to the State Government that establishment of plant near mining site would be the most viable option.
However, despite lapse of nearly four years the Government has failed to initiate the foremost step-entering into Joint Venture with the NTPC for coal mining despite the fact that Law Department has already cleared the draft of Joint Venture agreement, sources said, adding the inordinate delay in signing of JV is notwithstanding the fact that Deputy Chief Minister, Dr Nirmal Singh, who is also Minister Incharge Power and Finance Minister Dr Haseeb Drabu have stated a number of times during the past two years that JV will be signed shortly.
The Finance Minister, while presenting separate Power Budget in Legislative Assembly on March 23, 2015 had explicitly stated that Jammu and Kashmir State Power Development Corporation was shortly going to enter into JV agreement with NTPC for both coal mining and power generation. Similarly, in numerous official meetings relating to power sector particularly of JKSPDC the Deputy Chief Minister officially stated that JV agreement with NTPC was on the cards.
“The failure of the JKSPDC to enter into JV agreement with NTPC has turned the claims of the Deputy Chief Minister as well as Finance Minister as hollow”, sources said, adding “it seems that nearly four years is not sufficient period for J&K to initiate first step towards obtaining benefit of coal block”.
When contacted, Managing Director of JKSPDC, Shah Faesal confirmed that JV agreement was yet to be signed with NTPC. “We have forwarded the draft of JV agreement to the NITI Aayog and its response is still awaited”, he added.
“We are going to depute some officers for ensuring coordination with NITI Aayog so as to pave the way for signing of JV agreement with NTPC without wastage of more time”, he said while admitting inordinate delay in initiating this foremost step.
Expressing inability to specify time-frame for start of mining activities, the Managing Director of JKSPDC said, “a lengthy exercise is yet to be carried out before actual start of work on ground”, adding “after signing of JV agreement deliberations will be held between JKSPDC and NTPC over investment aspects and thereafter the State will have to make arrangement of funds for investment in the project. Moreover, Detailed Project Report will have to be prepared before going ahead with the project”.
All this indicates that nobody knows when J&K will be able to obtain benefit of landmark decision of the Union Coal Ministry taken nearly four years back.
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