GMDC has put on hold its plans to set up indigenous coal-based thermal power plants with an estimated investment of Rs 20,000 crore to generate 4,000 MW.

Uncertainties over the coal blocks allocated to the state PSU appears to be a key reason for the decision.

Five years ago, the Ministry of Coal had allocated the Morga coal block in Chhattisgarh and the Naini block near Angul in Odisha to GMDC, which prompted it to put in place pit-head power generation plans.

But GMDC’s 2,000 MW power plans went awry when the Ministry of Environment and Forests declared Morga a “no-go” area on environmental concerns. In the Naini case, GMDC faced a new situation when Adani Power and Torrent Power, which were to jointly set up a power plant near this coal block as “end-users”, wanted the power plant shifted to Gujarat, in which case GMDC would be shipping the Naini coal to the western state.

Now, the Odisha Government has objected to GMDC’s plans to ship coal to Gujarat and urged the Ministry of Coal to cancel the Naini block allocation to GMDC.

Meanwhile, sources said, the Ministry of Power has “supported” GMDC, which has done development for coal mining in Naini, for which the State PSU had formed a 50:50 joint venture with its partner, the Pondicherry Industrial Development Corporation.

Mr V.S. Gadhvi, Managing Director, GMDC, told Business Line on Wednesday that the plans for thermal power plants have not been shelved so far. “Apparently, the Centre is reconsidering its move in Morga to make it accessible to us again, or else we may get an alternative block. Similarly, the Ministries of Power and Coal may soon decide to let coal be shipped to Gujarat, as we have suggested.”

The plans are still on hold, he said, adding that these would get a fillip as soon as GMDC got the approvals. However, he admitted that the delays have caused considerable losses, particularly due to cost escalation.

At Naini, GMDC and its partner have access to 500 mt of coal reserves, enough to run a 2,000 MW power plant for 25-30 years, he said.

GMDC now has a coal block in Naini but can neither use coal to generate power in Odisha nor ship the fuel to Gujarat. In Morga, it does not have a coal block, as of now, but continues to have a joint venture with Hyderabad-based KSK Group for the proposed plant.

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