In a big relief to the power sector in Punjab, the Supreme Court has cleared all hurdles for operating the Pachhwara central coal mine, which will eventually save around ₹600 crore annually and reduce tariff by 20 to 30 paisa per unit.
Quashing a Punjab and Haryana high court judgment, a three-member bench of Justice L Nageswara Rao, Justice BR Gavai and Justice BV Nagarathna on Tuesday allowed Punjab’s plea to hire a new contractor to maintain and operate the mine.
The coal mine located in Jharkhand, with reserves for 50 years, was allocated to the state-owned Punjab State Power Corporation Limited (PSPCL) in 2001 for generating electricity at state-owned power plants. However, its operation has been stuck in legal tangles after the Supreme Court in 2014 cancelled its allocation along with that of 212 other coal mines in India.
On March 31, 2015, the coal mine was reallocated to the PSPCL, but its operations were again delayed due to legal issues.
In 2018, the PSPCL floated a tender and hired the firm DBL to develop and operate the mine. However, in 2019, the high court allowed the appeal of the previous mine operator, EMTA, to operate the mine, which led to a political slugfest, including criticism of the then advocate general Atul Nanda, and stalled the process further.
SC upholds hiring of new contractor
On Tuesday, the Supreme Court quashed this order and upheld the procedure followed by the PSPCL for hiring a new contractor through reverse bidding, which has saved the state government crores of rupees.
Former advocate general Atul Nanda, who appeared for state in the Supreme Court, said: “I have been vindicated. I am very happy as several hundred crores of rupees of consumers will be saved annually with the operation of the coal mine. It’s a benchmark judgment as the state had selected the vendor by reverse bidding to protect the interest of the consumers, which should be the priority of every corporation.”
PSPCL chairman-cum-managing director (CMD) A Venu Prasad said the coal from Pachhwara mine has a high calorific value. Spread over 1,051 hectare, the mine will produce 7 million tonnes of coal every year.
“Its operation will not only save us from coal crisis, but also save ₹600 crores annually. Now, we will try to divert this coal to private plants to further bring this benefit to ₹1,000 crore, which will reduce tariff,” he said.
The PSPCL has two coal-fired power generating units — Guru Hargobind Thermal Plant at Lehra Mohabbat in Bathinda and Guru Gobind Singh Super Thermal Power Plant at Rupnagar. Now, the Centre has also allowed the use of state-owned coal at private plants.
“Hopefully, mining operations at the coal mine shall commence in the next three to five months, as we have taken all other necessary permissions from the Jharkhand government,” he said.