ADANI LETHARGY IN COAL EXPLORATION AT MORGA II

Ahmedabad, Jan 22:

Hyderabad based KSK energy which has agreement with State owned Gujarat Mineral Development Corporation(GMDC) for supply of coal for its 1750 MW power plant at Chhatisgarh has written to Gujarat Government drawing attention that GMDC is going slow to start mining at Morga II coal block . It has drawn the attention that GMDC had promised it would begin the development of the coal block but however was going at a very slow pace which was resulting in financial loss to KSK.

The letter written by KSK gains significance because it is being openly alleged that GMDC has been deliberately going slow at the behest of a Gujarat based industrial house. The official KSK communiqué points out that GMDC has given Adani Enterprsises the job of exploration at Morga II block from where coal is to be supplied for the power plant. Interestingly, KSK and Adani are competitors in the energy sector.

GMDC awarded coal exploration contract to Adani enterprises in October 2009 but no work has yet commenced. K Kishore, director of KSK has written to industries and mines secretary Maheshwar Sahu in Gujarat requesting that GMDC be asked to present a plan as to how they wish to comply with the development milestones.

“we have endeavoured to keep all our commitments to GMDC and we are on schedule in our power project and cannot afford any delay in receipt of coal from Morga”, Mr S Kishore has written in his letter.

KSK cannot bid for power supply to Gujarat if coal exploration does not begin. KSK has offered to supply power to Gujarat at 1.98 rs per unit. This delay could benefit Adani who would then supply power at a higher rate to Gujarat. Earlier the Gujarat High Court also pulled up the Gujarat government for favouring Adani and buying power at higher cost and weeding out other competitors who were ready to supply power at same rate or in some cases even at rates lower than Adanis.

In 2008, Gujarat government purchased power on short term basis worth Rs 670 crore out of which 437 crore of power was purchased from Adani Enterprises. Adani enterprise sold power at a whopping rate of Rs 6.48 paise per unit.

However, in the letter sent to Gujarat government whose copy is with this newspaper, Mr S Kishore has pointed out that KSK has achieved financial closure for its entire 3600 MW power project to be set up in Chhatisgarh.. KSK has informed gujarat government that it so keen to commence plant at the earliest that it has already made necessary capital arrangements to fund the project execution. KSK has said for this ambitious 16,1`90 crore project, they have raised 4,048 crore from the market through its IPO and tied up with a variety of banking and financial institutions and have managed to get Rs 12,142 crore.

KSK has already placed equipment purchase order for its power plant but sadly till coal exploration commences, it is helpless.

KSK has written to Gujarat government, “our financial leaders have expressed their concern at the slow paced development of Morga II coal block. Failure of GMDC would result in huge financial loss for our company. “KSK has requested a joint meeting of GMDC and Gujarat government officials to sort out the issue.

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