PMO likely to take final call on fate of delayed Sarguja power project

Following the stand-off between the environment and coal ministries regarding the coal block for the ultra-mega power project, the PMO is likely to step in to resolve the issue.The Prime Minister's Office (PMO) is likely to take the final decision on the fate of the 4,000-MW ultra mega power project (UMPP) at Sarguja in Chhattisgarh, which has been delayed due to the non-receipt of environmental clearance.

The environment and forests (E&F) ministry has declared the Hasdeo coal block in Chhattisgarh—which was allotted by the coal ministry for the Sarguja UMPP—as a 'No Go' area, where coal mining cannot be done as it will adversely impact the environment.

The coal block was awarded by the ministry of coal to the ministry of power for captive use of the 4,000 MW UMPP in the state.

"As the matter has now become inter-ministerial, it may go to the PMO," a source close to the development said. He did not provide any further details on the matter.The environment ministry has maintained that it was not consulted by the coal ministry before the coal block was allotted."The coal ministry should have consulted the environment and forest ministry before allotting the coal block," an official in the E&F ministry said.

Power Finance Corporation (PFC), the nodal agency for the ultra-mega power project, invited preliminary bids for the execution of the Sarguja project in March this year. The last date for submission of bids was 3rd May, which has now been extended till 5th July due to objections raised by the ministry of environment and forests.PFC forms a special purpose vehicle (SPV) for all the UMPPs, the SPV acquires the land, provides water availability and coal linkage for the project.Sarguja is the fifth UMPP in a series of such projects planned by the power ministry.The government has already allotted four UMPPs to the successful bidders. Reliance Power has bagged three of the four UMPPs at Sasan (MP), Krishnapatnam (AP), and Tilaiya (Jharkhand), while Tata Power has been awarded the Mundra UMPP in Gujarat.These projects are likely to provide a thrust to the government's capacity addition programme in the Twelfth Five Year Plan, starting April, 2012.