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Coal delay hitting NTPC, says Moily

Power minister Veerappa Moily has expressed concern over delays in the allocation of coal blocks to NTPC, saying it is adversely affecting the capital expenditure plans of India’s largest power producing company.

business Updated: Oct 22, 2012 23:09 IST
Anupama Airy

Power minister Veerappa Moily has expressed concern over delays in the allocation of coal blocks to NTPC, saying it is adversely affecting the capital expenditure plans of India’s largest power producing company.

In a recent letter to Prime Minister Manmohan Singh, a copy of which is available with HT, Moily stated that these delays have affected the construction of power capacity worth 8500 MW by NTPC.

He said delays will “adversely affect NTPC’s capital expenditure, which is Rs. 21,000 crore for the current financial year (2012-13) and Rs. 2.2 lakh crore for the 13th Plan (or 2012-17).”

Moily further wrote that there have been delays even after a recent meeting by finance minister P Chidambaram conveyed that coal block allocation letters be issued to NTPC at the earliest. The finance minister had on September 12 reviewed the capital expenditure plans of NTPC.http://www.hindustantimes.com/Images/Popup/2012/10/23-10-12-biz-03.jpg

Moily said that even though NTPC has been given in-principle allocation of coal blocks for 8,460 MW of power plants (Kudgi 2,400 MW, Barethi 3,960 MW, Gajmara 1,600 MW and Unchahar 500 MW), it cannot obtain environment clearance and commence construction activities of these projects pending a formal allocation letter from the coal ministry.

Also, despite coal ministry’s reluctance to re-allocate three coal blocks to NTPC — Chatti-Bariatu, Chatti-Bariatu (South) and Kerandari — the power ministry is pushing for withdrawal of de-allocation citing that the delays were beyond NTPC’s control.

These blocks were de-allocated due to delays in developing coal mines.

“The coal ministry had agreed in-principle in January 2012 to re-allocate those blocks. The orders for re-allocation are yet to be issued to save NTPC from financial problems,” Moily said.