PANJIM: It’s a light bulb that could just blow off. The Goa government’s dream of a 25,000 crore investment in the next five years stretching to a decade, may have just got a power shock, with a future of the Gare Pelma Sector III coal block in Chattisgarh allotted to GIDC, perilously hanging, after the apex court’s declaration that all coal blocks allotted between 1993 and 2008 were illegal.
The coal block was allotted to Goa on November 12, 2008.
The impact is simple. If there is no coal to be mined due to the cancellation of the coal block, GIDC will not be able to supply coal to the 1800 MW capacity power plant of KSK Mahanadi Power Company, with whom Goa’s GIDC has entered into a PPP project. As per the agreement Goa will get 270 MW or 15 % p.a. from the power generation with an option of another 180 MW or 10% of the generation, while the Chattisgarh government is supposed to get 37.5 MW, since the coal block is located there.
Crucially the Goa investment policy banked totally on this captive power. The section on power in the Goa investment policy stated “The coal block has the potential to power an1800 MW power plant. An agreement has been entered into with a developer who would provide minimum power of 15% i.e. around 270 MW to the state of Goa.
The Goa government also has the first right of refusal for another 10% power i.e. around 180 MW from the power plant. Thus, the total availability of power from the coal block is 450 MW.
Naturally industry is circumspect and worried. (See industry reactions on page 11: Worry lines grow in Goa Inc). The head of the CII Kirit Maganlal, led the worry lines, by saying that if these blocks were cancelled, people would simply move out. There are power dependent international pharma companies which are presently struggling with the more pressing problem of the private gas based power of Reliance not available. With the captive power of Chattisgarh under a cloud, getting up and leaving may be simpler than hoping for a power boost. But potential investments will be affected since they will start from scratch.
However Chief Minister Manohar Parrikar still hopes that the coal block can be salvaged. Speaking to Herald, he said “I will propose to the government, that we will buy the entire power generated by the power company (KSK Mahanadi Power company). If there is no commercial use of the power the block can be saved, I feel. The other option is to buy power generated from imported coal which will increase the per unit capacity by around 80 paisa”
The only silver lining is that the industry is willing to pay. Said Maganlal, “As opposed to paying Rs 16 per unit, industry will pay readily, if the cost of power per unit is even Rs 6 and under”. The dark cloud though is the question of whether will Goa get the power.
