KSEB given the final nod for backing out from coal mining

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The Kerala government has given the final call for the Kerala State Electricity Board (KSEB) to stop its search of a coal block in Odisha. The government in its order dated April 6, 2019, said that the Board may opt out of the joint venture company – Baitarani West Coal Company Ltd (BWCCL).

The BWCCL formed as a joint venture between KSEB, Odisha Hydro Power Corporation and Gujarat Power Corporation Ltd in 2008 was to explore the possibility of Baitarani West coal block. As per the agreement, mining should have started within four years of the formation of the company. However, mining could never be started in the coal belt in Odisha, which had prompted the KSEB to think of a withdrawal.

The Ministry of Coal allotted the Baitarani West Coal block in 2007 but it de-allocated the block in 2012, stating that it failed to make it operational. Ait also imposed a fine by invoking 50 percent of the bank guarantee of Rs 75 crore by the BWCCL.

It has also to be noted that the Supreme Court in its 2014 orders cancelled all the allocations of coal blocks given since 1993 and this was applicable to Baitarani also. As per the Coal mines (Special provision) Act, 2015, eight coal mines were allotted to the host state and as such Baitarani went to Odisha Mining Corporation. Once Baitarani was taken back, the joint venture company became meaningless.

The KSEB’s share in BWCCL was Rs ten crore. With the Ministry of Coal imposing a fine of 50 per cent of the bank guarantee of Rs 75 crore, KSEB will lose 12.5 crore.

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