Delhi HC asks govt to consider Balco’s coal mine plea

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New Delhi | Published: May 26, 2015 12:55:58 AM

The Delhi High Court on Monday asked the government to treat Bharat Aluminium Company’s (Balco) petition as its representation...

The Delhi High Court on Monday asked the government to treat Bharat Aluminium Company’s (Balco) petition as its representation to it and decide whether it was to be “chosen as the succesful bidder” for a Chhattisgarh coal block within a month.

Balco, a Vedanta Group firm, had challenged the government’s decision to cancel its bid, which was the highest, for Gare Palma IV/1 coal block and annulment of the tender process on the grounds of presumed cartelisation. Balco wanted the HC to declare the action of government to be arbitrary and direct allotment of the coal black in its favour.

A bench of justices BD Ahmed and Sanjeev Sachdeva while directing the Centre to consider Balco’s plea within four weeks also allowed the company to file fresh petition in the event the decision went against it.

Senior counsel AM Singhvi and counsel Prashanto Sen, appearing for Balco, argued that coal is required for the company’s 600 MW captive power plant which is to supply power to its aluminium plant, which produces 3 lakh tnnes per annum. “Early commencement of power plant will ensure that investments of R7,000 crore made are utilsed efficiently… and commencement of mining operations will result in revenue generation of R950 crore annually as opposed to R60 crore annually if mines are handed over to Coal India (CIL),” Balco stated.

Singhvi further added that each day’s delay is resulting in production loss of 16,438 tonnes per day and a revenue loss of R2.85 crore per day from coal production for Balco.

The government had cancelled bids of both Jindal Power, a subsidiary of Naveen Jindal-owned JSPL, and Balco, which had emerged top bidders in the recently held auction, for four coal blocks amid speculation of cartelisation.

Jindal Power had emerged as successful bidder for Gare Palma IV/2, Gare Palma IV/3 and Tara coal blocks, while Balco had successfully bid for Gare Palma IV/1 coal block.

Balco had submitted a closing bid of R1,585 per tonne for the Gare Palma 4/1 block while Jindal Power had submitted a closing bid of R108 per tonne for the Gare Palma 4/2 and 4/3 blocks and R126 per tonne for the Tara coal block.

The coal mine auctions took place after the Supreme Court in September last year cancelled 204 coal-mining permits awarded to companies, terming their allotment arbitrary and illegal.

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