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EC amendment - a problematic proposal by IL&FS

Edition: October - December 2018

In October 2018, IL&FS Tamil Nadu Power Company Limited (ITPCL), which operates a 1200 MW coal power plant in Ariyagoshti, Bhuvanagiri Taluk, Cuddalore, applied to the Ministry of Environment, Forest and Climate Change (MOEF&CC), to amend its Environmental Clearance (EC). It proposed the use of a new coal blend of 75% imported Indonesian coal and 25% lignite from Neyveli Lignite Corporation India Limited’s mines in the same district, and sought permission to transport lignite from the mine by road, a distance of 44 kms coursing through 27 villages and 2 towns. 

This proposal was to be considered by the Expert Appraisal Committee (EAC) in its monthly meeting held later that month, where projects seeking fresh EC, or amendment and/or extension of EC are usually discussed. The EAC is a body of experts and professionals constituted under the EIA Notification 2006, and is tasked with deliberating on different projects requiring an EC. Different EACs are constituted for different project/activity categories (listed in the Schedule of the Notification) requiring an EC. When it receives a request for change of the fuel mix- as this request from ITPCL, the EAC is empowered to recommend to the MOEF&CC that a public hearing should be conducted before allowing such a change. 

CAG, along with several other CSOs and local communities, demanded that the EAC not allow the project’s EC to be amended, for reasons detailed in this article.

Power Plant history

The power company commissioned its first unit of 600 MW in September 2015, followed by another unit of the same capacity in April 2016. The plant has an environmental clearance valid until May 2020, for commissioning up to 3180 MW. 

The plant has been found to be in legal violations on multiple occasions in the past, and has had its EC suspended and later quashed by the National Green Tribunal. The plant is currently operating based on a stay of the aforesaid NGT order, issued by the Supreme Court in March 2015.

ITPCL is part of the IL&FS group, which is in the throes of a financial crisis. In September 2018, bankruptcy proceedings were launched against the power company for defaulting on loan payments. In our previous issue, we published a financial analysis of the company. There have also been changes to the company’s management, significantly, the exit of its whole-time director and chairman since 2011, Mr. MS Srinivasan, a retired IAS officer. He stepped down a month after this proposal was submitted to the MoEF&CC.



The plant currently runs on coal which is imported from Indonesia via the Karaikal Port, from where it is transported to the power plant through rail directly to the plant site. In all, the 5 million tonnes of coal the plant annually uses travels a rail distance of 128 km from port to plant. 

The plant had sought permission to use the new coal mix only for the two operational units, stating that it would seek another EC amendment for the remaining capacity later when work on it begins.

Community action

A team from Citizen consumer and civic Action Group (CAG) had visited the plant site in March 2018, and documented the problems faced by the local communities. The main source of coal dust was the storage yard, where coal was stacked without adequate safeguards in place to prevent it from polluting the surrounding environment. The rakes carrying coal were also not covered, due to which coal was found to be spilling on its way to the plant. 

Later, coinciding with the southwest monsoon season, the villages around the plant experienced a lot of problems caused by coal dust. Among the severely affected was an elementary school- Panchayat Union Elementary School of Pudhukuppam- situated less than 100 metres from the plant. 

In July 2018, condemning the company’s apathy to the woes of those living around it, and its decision to construct a captive port (to carry its coal) when it has only received temporary reprieve in the form of a stay order from the Supreme Court, fishermen from several neighbouring villages organised a sit-in protest and abstained from fishing. It was only after local elected representatives intervened and assured of action that they ended their protest. The local communities took the issue to their District Collector, who visited the premises. Later, when he was transferred, the new Collector was also approached, and he too undertook a site visit.

The affected communities also highlighted their issue with the media, both English and vernacular. These were shared with the EAC as well and helped bolster their case.

The State Pollution Control Board (SPCB), which is the agency responsible for monitoring the power plant’s adherence to environmental standards, has conducted a site visit based on complaints by the villagers and asked the company to take remedial action. Interestingly though, the villagers were unaware of any action taken by the SPCB based on their complaint. That the SPCB ordered remedial action is known only from recordings of the proceedings of the EAC meeting, based on what the company said. It appears that the SPCB has shared its report with the company asking it to take remedial action, but not intimated the villagers who originally complained about the plant. 

According to the EAC minutes, “The SPCB confirmed that there was significant coal dust pollution occurring in the vicinity of the power plant, affecting the health of the residents, including school children”. It has now asked the company to submit a point-wise compliance report based on the conditions laid down by it. In the meantime, CAG members have been training local communities in and around the plant area about the interventions possible to ensure polluting industries adhere to the mitigation measures stipulated by the ministry while awarding environmental clearance, using a combination of tools, including a curriculum prepared for community outreach.

Proposal for amendment

It is in this context that the company approached the MoEF&CC to change its fuel mix, and resultantly, include another mode for transport for coal. Under this proposal, about 168 trucks with coal would be plying every day through 27 villages and 2 towns to reach the coal to the plant. This was proposed even as the company acknowledged that road transport of coal was ‘not preferable’ in its technical note submitted to the MoEF&CC (4.4 Selection of Preferred Mode of Transport for Indigenous Coal). But it was proposed anyway as a temporary measure, until railway lines are established by NLC, although the proposal was silent on when this would be executed.

Interestingly, the ‘interim solution’ route has been used by the company in the past too, when it got its EC amended to allow coal movement through railway siding as a temporary measure, until it established a captive port for importing coal. Three years later, the company continues to move coal through the ‘temporary route’. Work for the captive port seems to have begun this year.

To top it all, this proposal, which does not include any technological advancement and is likely to cause more environmental impact due to the transportation of coal by road, was made in the name of ‘modernisation’ by the company. CAG’s comments to the EAC about the proposal can be found here.

EAC’s decision

Following deliberations of the power company’s request, the EAC has deferred a decision on the proposal, asking for the project proponent to submit an implementation status of the conditions laid down by the TNPCB. The committee has noted that the plant has been operating in violation of the Environmental Clearance, and needs to correct it before it applies for amendment again. The EAC has also noted that the company will likely need a fresh Environment Impact Assessment, when it chooses to expand its capacity, as it has not begun work on its remaining units yet.

The EAC’s decision is a welcome step in curbing the plant’s approach to obtain permissions using a piecemeal approach through amendments to EC. It also shows that organised and united community action can be used to bring errant industries to book. What remains to be seen now is if the power company will adequately address the concerns raised, and convince the committee to amend its clearance, once more.

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