The Delhi High Court granted a big relief to JSPL yesterday, regarding coal block end-use issue. The court has also directed the Centre to take a brief review before starting the auction.
On 11 Feb’15, the Delhi High Court has directed Centre to take a review on its earlier decision for merging Utkal B-1 (JSPL) and Utkal B-2 (Monnet Ispat) with change of end-use. The HC pointed that earlier the end-use had changed in respect to ‘energy security of the country’, which refers to the coal reserves not power as many different sources are available to generate power.
Earlier, the JSPL had filed a petition against the government’s decision on changing end-use of blocks, which will restrict the company to participate on forth coming auctions. The company has already invested INR 300 billion to set up end-use plants near these mines. Previously, Gare Palma IV/6 (Chhattisgarh) and Utkal-B1 (Odisha) coal blocks were allotted to JSPL for Steel &Sponge iron Unit respectively.
| Mine | Erstwhile holder | Schedule |
Previous End use |
State |
Changed Use Project |
| Utkal-B1 | JSPL |
Schedule III |
Sponge Iron |
Odisha |
Power |
| Utkal B2 | Monet Ispat and Energy |
Schedule III |
Sponge Iron |
Odisha |
Power |
| Gare Palma IV/6 | JSPL |
– |
Steel |
Chhattisgarh |
Power |
As per Delhi High Court, “The committee didn’t consider the negative impact on the steel sector while changing the end-use. The government should give serious consideration to Steel sector.”
“Payment of penalty is the only eligibility criteria for bidding, according to the Coal Ordinance, 2014. The company has already paid INR 20 billion as penalty. Thus, the government didn’t have the power to pass order to change end use“, said JSPL’s official.
To follow the court directive, the technical committee will undertake necessary evaluation. The auction of 3 mines will kick-start from 25 Feb’15 and continue till 5 Mar’15.
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