BS reported that Orissa state’s steel & mines department has given its go ahead for the proposal of the Gujarat Mineral Development Corporation to carry coal from the Naini coal block in Orissa to meet the requirement of Torrent Power and Adani Enterprises.

The final decision is pending with the chief minister's office.

However, the department has recommended that the state should be suitably compensated given that GMDC was allocated the coal block for setting up a power plant and the company needs to wash coal in the state before transporting it.

A top official of steel & mines department told Business Standard that "GMDC was allocated the coal block for setting up a power plant in the state but now they want to carry coal to Gujarat. We cannot object to the proposal as the laws don't disallow the transport of coal to some other state. However, we have recommended that Orissa should be suitably compensated as the coal block was allocated for the purpose of setting up a power plant and the coal has to be washed within the state before being transported.”

It may be noted that the Naini coal block under Talcher Coalfields under the command area of Mahanadi Coalfields Ltd was allocated jointly to GMDC and Puducherry Industrial Promotion Development & Investment Corporation Ltd for setting up power plants. While GMDC had proposed to set up 1500 MW power plant in Angul district, PIPDIC Ltd was to set up 1800 MW to 2000 MW power plant at an undecided location in the state.

Even though the state government is yet to decide on the issue, industry observers have stated that giving the nod to GMDC will deprive Orissa of value creation and economic benefits, Besides, any decision in favour of GMDC will set a bad precedent for other state government undertakings which have been allocated coal bocks in the state for setting up independent power plants as the move will spur similar demands by these state PSUs.

Apart from GMDC, Kerala State Electricity Board, Chhattisgarh Mineral Development Corporation, Assam Mineral Development Corporation and Meghalaya Mineral Development Corporation have been allocated coal blocks for the purpose of setting up power projects.

(Sourced from BS)