FM may push for restoring NTPC’s de-allocated blocks
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In a bid to improve the valuation of state-run NTPC ahead of its impending public offer, finance minister P Chidambaram is likely to meet coal minister Sriprakash Jaiswal on Monday to press for restoration of the power giant's three de-allocated coal blocks.
The government is eyeing to mobilise close to Rs 13,000 crore through the stake sale, but the power ministry is insistent that NTPC's follow-on public offer should commence only when the blocks Chatti-Bariatu, Kerandari and Chatti-Bariatu (South) are restored back to the PSU. The government currently holds 84.50 per cent in NTPC, and a stake sale of 9.5 per cent would bring down the government's stake to 75 per cent. The company has a production capacity of 39,674 MW.
These mines which were de-allocated by the coal ministry on the citing their non-development by NTPC, together have an estimated reserves of around 850 Million Tonne and can generate 8,500 Megawatt electricity. A source in the power ministry said NTPC has already invested over Rs 150 crore so far for developing the blocks. Of the de-allocated blocks, Chatti Bariatu and Kerandari coal blocks were allocated to NTPC in 2006 while Chatti Bariatu (South) block was given to it in 2007.
On January 21, Chidambaram is expected to ask coal minister Sriprakash Jaiswal on re-allocating the coal blocks back to NTPC for which power minister Jyotiraditya Scindia has been pressing hard. A government source said that power ministry Jyotiraditya Scindia, who is also expected to be present in the meeting is likely to argue that re-allocation of the coal blocks would boost the overall market valuation of the Maharatna power giant and improved share prices would likely fetch the government higher returns. The finance ministry has set a target of mobilising Rs 30,000 crore in the financial year ending March 2013.
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