Steel tycoon Naveen Jindal in trouble for coal-to-oil block
Jindals had signed an MoU with Lurgi in 2008 and it was on the basis of this technology tie-up that they got the conditional allotment of Ramachandi coal block for producing 80,000 barrels of crude oil per day. But just after six months, i.e., in September 2009, the Jindal Group discontinued the MoU and came out with another global tender for finding a new technology partner, in which Lurgi refused to participate. Jindals then appointed Fluor Corporation of USA to carry out a detailed study which was in a clear violation of allotment terms.
CBI found this to be a case of forgery since this high value coal block was allotted to the Jindals on a conditional basis and the technology specification essential to the extraction of crude oil from the mined coal. However, after keeping the block idle for the last five years, Jindals pleaded that they could not proceed with the project because of non-cooperation from the Odisha government in providing them water, prospective licence and land.
But CBI sleuths have found that the Odisha government was the first one to draw attention to this discrepancy, and had written to the Jindals saying this is a conditional coal block the allotment of which is technology-specific. It then sought direction from the union coal ministry which replied that it was allotted by the planning commission and not the coal ministry. Moreover, the planning commission informed the Odisha government that it was done through an inter ministerial group (IMG) which has already been dissolved. Finally, it was referred to Engineers India Ltd (EIL) which was the consultant of that IMG. EIL finally upheld their earlier position that this technology-specific ‘fixed lead gasification’ is the only solution for domestic coal that has a high ash content and the technology licence is available only with global major Lurgi.
After laying hands on this sensitive document, CBI is all set to charge Jindals for forgery and the government of India has no other option but to cancel this high value coal block from the Jindals. Incidentally, in the first quarter of 2013, the deputy managing director of Jindal Group, B R Sharma, had announced that they were going ahead with Lurgi, whereas the truth was that they had dissociated themselves from Lurgi way back in 2009. This project was supposed to produce one tonne of crude oil from six tonnes of coal. Now Naveen Jindal and his top officials are trying to patch up with Lurgi and recently had delivered a meeting with its India head, Stephen Noel. Jindal wants Lurgi to give them a letter saying that the MoU between them is still valid whereas in reality it had expired long ago. But according to sources, Lurgi has not obliged them yet.