Panaji: The Goa Industrial Development Corporation (GIDC) will have to raise funds of nearly Rs 200 crore from the capital market in order to pay performance guarantee to the Centre to begin operations at a coal block allocated to it at Dongri Tal II in Singrauli in Madhya Pradesh, as the finance department has turned down its request of financial approval for the same.
A few months back, the GIDC had borrowed Rs 200 crore for making repayment to the Special Economic Zone (SEZ) promoters.
The GIDC had made a proposal to the finance department seeking nearly Rs 200 crore from the government to pay the performance guarantee of around Rs 191 crore to the Centre so as to begin coal mining operations at the Dongri Tal block in Madhya Pradesh.
Sources in the department said that as the GIDC is a corporation, as per the business rule, the government cannot give funds to it to pay performance guarantee for the project. Moreover, the financial situation of the state is also shrinking, the source said.
As required by the norms set by the central government, the state-run corporation has to pay the performance guarantee to begin operations at the coal block allocated to it.
The finance department has said that the GIDC is a corporation and it should try to raise capital from the open market to fund the project, which is in essence a business proposal.
It may be noted that the Dongri Tal coal block has been allocated to GIDC as part of the fifth tranche of allotment by the Coal Ministry. Following this, the GIDC was supposed to sign the coal mine development and production agreement with the Centre by October 30.
Interestingly, GIDC has also applied for another coal block as part of the sixth tranche of allocation by the Coal Ministry.
In order to repay loan taken from a private bank for making repayment to SEZ promoters with interest, the GIDC has moved a proposal for auctioning five lakh square metres of land at Verna. However, the proposal is yet to get the green signal from the government.