A takeover not to be

Centre stonewalls Telangana’s plan to take over Singareni Collieries Company Ltd fully. The Centre’s decision was not likely to have any impact on the operations: TRS.

Updated - November 16, 2021 05:05 pm IST

Published - May 13, 2015 10:47 am IST - HYDERABAD:

In a major setback to the Telangana government, the Centre has stonewalled the former’s plans to expand the activities of Singareni Collieries Company Ltd (SCCL), a public sector undertaking in which Telangana holds a majority stake, by taking it over completely.

The Centre’s refusal to part with its 48.90 per cent equity in SCCL was informed to Lok Sabha by Union Coal Minister Piyush Goyal in the form of a written answer on Tuesday, in response to a question from Telangana Rashtra Samithi (TRS) member A. Seetharam Naik.

“It would not be in the national interests to divest Government of India’s shares as coal is a national asset and it has to be used in a manner so that need-based equitable distribution is effected for the entire country, including the non-coal bearing States,” the Minister noted in his written reply.

The Union Minister further stated that the Government of Telangana had submitted a proposal in August 2014 to purchase the Government of India’s equity in SCCL. The proposal was examined in the ministry and the State government was informed of the Centre’s decision, the Minister said.

When contracted, sources in the TRS said that though the Centre’s decision was not likely to have any impact on the operations and revenues of the profit-making SCCL, it would surely slow down the plans of Chief Minister K. Chandrasekhar Rao, who had been “planning big” for SCCL.

“The Chief Minister had a vision to make SCCL a global coal giant by encouraging it to bid for coal mining not only in other parts of the country, but in countries like Australia, Indonesia, Mozambique and South Africa. Making Telangana a power surplus State with its own coal tie-up was also part of his plans,” the sources explained.

Aware of the problems in the energy sector in Telangana, particularly after the State bifurcation, Mr. Chandrasekhar Rao was thinking of enhancing power generation capacity with the help of thermal plants and it included expansion of SCCL beyond the country’s frontiers for meeting the coal needs of such plants.

In a review meeting held on SCCL in July last year, the Chief Minister had directed the authorities concerned to explore the possibilities of taking over the equity of the Government of India in the company so that it could become fully-owned entity of the Telangana State. He felt that chances of getting the Centre’s stake in SCCL were bright in the backdrop of the Centre’s disinvestment policy.

All about Singareni Collieries

Has turnover of nearly Rs. 20,000 crore

Pays over Rs. 1,500 crore royalty to the Centre

Fills State Government coffers by over Rs. 1,000 crore

Over 8,500 million tonnes of coal reserves in Pranahita-Godavari valley

Limited success in joint ventures with NTPC, MDC in coal mining

Centre’s version (subhead)

It would not be in the national interest to divest Government of India’s shares as coal is a national asset and it has to be used in a manner so that need-based equitable distribution is effected for the entire country, including the non-coal bearing States

What now? (subhead)

It would surely slow down the “big plans” for the Chief Minister for the SCCL, according to sources in the TRS

The Chief Minister planned to encourage SCCL to bid for mining in countries such as Australia, Indonesia, Mozambique and South Africa., according to the sources.

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