Coal India's power foray may get delayed over land issues

Coal India Ltd’s (CIL) plan to set up its maiden power project in partnership with private sector is set to suffer delays on issues relating to compensation for land acquisition.

The 1,600 mw power project in Odisha, in which majority 51% stake would be divested to private sector by CIL subsidiary Mahanadi Coalfields, is facing opposition over compensation decided upon following a Supreme Court judgement in 2010.

The land was acquired about 20 years back and is in the possession of the company.

“Some local touts are instigating people telling them why should Mahanadi Coalfields, a mining company need to go for a power project. Their real motive is to extract higher compensation,” A N Sahay, chairman and managing director of Mahanadi Coalfields Ltd, told dna.

“Most of the villagers have been really cooperating with us, and despite a long delay in payment of compensation, they have been patient. We are giving Rs 10 lakh an acre as compensation, which was accepted by the Supreme Court. But we fear the problem will continue,” he said.

The Supreme Court in 2010 had directed the Centre to set up a Claims Commission to determine the payment of compensation to land losers in Sundergarh district, who were not paid even 23 years after their land were acquired.

The case came before Supreme Court when Mahanadi Coalfields challenged an order of Orissa High Court directing payment to the affected villagers.

The CIL arm had opposed as it wanted to denotify the land acquired more than 20 years ago as it no longer required it.
The high court had ruled that any person whose land is acquired must be paid compensation.

Mahanadi Coalfields now plans to utilise the land for setting up the power project at the Basundhara-Garjanbahal coal mines area of Sundergarh.

Barring the compensation issue, Sahay doesn’t foresee any other factors delaying the project.

“The land (conversion) clearance is expected soon and it’s not an issue at all while in-principle approval of coal linkage is already there and final approval is expected shortly. After all these approvals in hand, we will go for tendering and induct a private partners as we don’t have expertise in power generation,” he said.

CIL, as earlier reported in dna, has changed the quantum of stake to be sold to the private sector in the special purpose vehicle, Mahanadi Basin Power Ltd, bringing it down to 51% from 74% that it was willing to concede earlier.

Mahanadi Coalfields would retain the balance 49% stake in the SPV.