Tata Sons and Jindal Steel and Power (JSPL) will be the first two companies

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in the country to produce oil from coal through projects entailing a total investment of about Rs 90,000 crore.

A decision to this effect was taken by the prime minister’s office (PMO) on February 27 — two days before the code of conduct came into force. However, the haste would ensure no profit for the government because it will not get any share from the near 3.5 million tonnes of oil and oil products from each coal-to-liquid (CTL) block.

A top coal ministry official said Strategic Energy Technology Systems (SETSL) — the consortium between Tata Sons and South Africa-based Sasol Synfuels International (Proprietary) — has bagged the Arkhapal block.

Jindal Steel and Power has been awarded the Ramchandi promotional block. Both the blocks lie in Talcher, Orissa.

On being contacted, a Tata Sons spokesperson said refused to make any comments.

A JSPL spokesperson confirmed the company is interested in the project. The spokesperson, however, said the company has not received any written communication from the government. JSPL will partner with Germany’s Lurgi for developing the project.

The ministry official said that the government could not ask for its share from the CTL projects because the coal sector has not yet been opened for competitive bidding. A bill to amend the Mines and Minerals (Development and Regulation) Act, 1957, was introduced for discussion in Parliament during the recent session that concluded on February 26.

A group of ministers had last year approved introduction of competitive bidding in the coal sector.

“The law ministry has objected to our proposal seeking share from the CTL projects because the bill to introduce competitive bidding in coal sector has not yet been cleared in Parliament,” he said.

He added that the SETSL and JSPL would be required to set up the project within the timeline as proposed by them during presentations made before the inter-ministerial group (IMG) formed for the purpose.

SETSL and JSPL were the only two companies left in the race for the CTL project after the IMG, headed by Planning Commission member (energy) Kirith Parikh, scrutinised applications received from 22 interested companies in August last year.