Tilaiya UMPP also faced with issue of surplus coal

The issue of diversion of surplus coal is likely to create problems for yet another set of coal blocks associated with the massive ultra mega power projects (UMPP), as the reserves at the Kerandari B and C coal blocks, allocated for Reliance Power`s 4,000 MW Tilaiya UMPP, in Jharkhand, seem to be more than what is needed by the project. As indicated by Central Mine Planning and Design Institute Limited (CMPDIL) to the Ministry of Coal (MoC), the combined mine capacity of these blocks is 30 million tonnes per annum (MTPA), whereas a UMPP requires around 18.8 MTPA of coal, at max. Thus, the ministry has asked CMPDIL to furnish its comments on the availability and possible use of surplus coal from the Kerandari blocks.

Pertinently, the blocks, with an estimated geological reserve (GR) of 972 MT, were allocated to Jharkhand Integrated Power Limited, a special purpose vehicle (SPV) floated by Power Finance Corporation (PFC) for the preliminary development activities at the Tilaiya UMPP, to exclusively meet the fuel needs of the project. However, due to this ambiguity over the coal reserves of the blocks, the MoC has not been able to indicate the amount of bank guarantee (BG) that is to be submitted against the insured development of Kerandari B and C coal blocks, to the SPV, despite the company`s repeated requests for the same, in order to facilitate the commencement of development activities at these coal blocks.

Our readers would recall that the MoC encountered the same issue earlier, as the Moher, Moher Amlori Extension and Chhatrasal coal blocks, allocated for Reliance Power`s 3,960 MW Sasan UMPP, were, subsequently, found to have excess reserves. Accordingly, after much deliberation on the issue, the ministry had to, under a special dispensation, approve RPL's petition for diversion of the surplus coal to the company`s Chitrangi power plant, located in the same state. The dispensation allowed to Reliance Power was a marked departure from existing norms, given the fact that any surplus coal generated from such blocks, currently, remains under the control of Central Government, which can then dispose off the same through the public sector coal major-- Coal India Limited.

In view of these facts, it is quite likely that the MoC`s apparent miscalculation of coal reserves for the Tilaiya UMPP-associated coal blocks in the pre-allocation stage will lead to another round of petitions from Reliance Power, unless this issue is nipped at the bud, right away.