Odisha cancels JV with Sainik for coal block operation
Bhubaneswar, Oct 1 (PTI) Criticised for giving 74 per cent stake to a private company for coal mining in the state, Odisha Mining Corporation (OMC) on Monday said its joint venture agreement with Delhi-based Sainik Mining and Allied Services Ltd (SMASL) has been cancelled.
The JV between OMC and SMASL was signed in 2003 to develop Utkal-D coal block having a reserve of 145 MT in Angul district. It had been alleged that the JV agreement was made in violation of the Coal Mines (Nationalisation) Act-1973.
“As there has been no progress in coal mining in 10 years, we have cancelled the JV,” OMC Chairman-cum-managing director Saswat Mishra told reporter’s here.
Kalinga Coal Mining Pvt Ltd (KCMPL), a joint venture company was formed with 26:74 equity holding between OMC and SMASL in 2003. The OMC has already informed SMASL about its action on cancellation of the JV, the CMD said.
Meanwhile, a PIL has been filed in the Supreme Court over OMC’s deal with SMASL for developing Utkal-D coal block, where 74 per cent stake in the joint venture has been conceded to the private player.
Clarifying OMC’s action of giving 74 per cent stake to a private player, Mishra said: “The financial condition of the OMC in 2002-03 was very bad. Even we were depending on loan to pay salary to employees. Therefore, the corporation had no alternative than giving 74 per cent stake to a private player which agreed to bear all the cost for coal mining.”
However, he said, with improvement of OMC’s financial condition over the years and deposit of about Rs 5,000 crore in bank account, efforts were made to enhance OMC’s equity share from 26 per cent to 51 per cent. But, this was not possible due to various reasons. Hence, OMC decided to cancel the JV, Mishra said.
The equity pattern in the earlier joint venture had also drawn flak from the Ministry of Coal which had held OMC guilty of violating the Act by conceding controlling stake to a private player for developing a coal block alloted to a state PSU.
“The ministry had issued a showcause notice to OMC in this regard July 2010,” Mishra admitted.
Clarifying the reason for delay in cancelling the JV, Mishra said: “We had asked a consultant to study the matter.
The state law department also studied the matter after the agreement was questioned.”
Mishra also said the corporation had asked the SMASL to surrender the land acquired for rehabilitation colony and other allied activities.
Meanwhile, the Utkal Coal Bolck-D was awaiting Stage- II forest clearance, the recommendation for which was sent by the state government to the Ministry of Environment & Forests (MoEF) in January 2008.
On the fate of the coal block allocated to the OMC, Mishra said the corporation would develop it on its own instead of making any joint venture with any company. “Now we have required funds in hand to carry forward the coal mining activities,” he said.