Odisha to Push Ahead With OCPL–OPGC Merger Plan Despite Coal Ministry Objection
State prepares detailed response, argues government-to-government merger should not face restrictions meant for private entities
Bhubaneswar: The Odisha government asserted that it will continue pursuing the merger of Odisha Coal and Power Limited (OCPL) with Odisha Power Generation Corporation (OPGC), a day after the Ministry of Coal declared that such a merger is not permissible under existing allotment and contractual conditions.
OCPL, jointly owned by OPGC (51 per cent) and the state government (49 per cent), was created to supply coal to OPGC’s thermal power projects. The OPGC board had already formalised the merger proposal in August, aiming to consolidate mining and power generation operations under a single entity for greater operational efficiency.
However, the Ministry of Coal, in its recent communication to OCPL’s CEO, said the merger violates multiple clauses of the allotment agreements and bid documents governing OCPL’s coal blocks, namely the Manoharpur, Dipside Manoharpur, and Tangardihi North mines.
According to the ministry, the merger would dissolve the existing joint venture structure and lead to the transfer of all of OCPL’s rights—including mining rights—to OPGC, thereby altering the ownership pattern. Citing specific contract conditions, the ministry underscored that such changes are strictly prohibited.
In the case of the Manoharpur and Dipside Manoharpur blocks, the relevant allotment agreement forbids joint venture partners from transferring or alienating shareholding or any interest in OCPL. The restriction applies even to internal transfers, and prohibits any shift of ownership to a third party. Similarly, the Tangardihi North bid document and Coal Block Development and Production Agreement (CBDPA) specify a lock-in period during which no change in control of the allottee is allowed.
The ministry further pointed to Clause 13.3.2 of the allotment agreement, which states that any attempted transfer of rights or interests that violates the contractual terms would be deemed void ab initio—non-existent from the beginning.
Based on these restrictions, the ministry concluded that it cannot grant in-principle approval for the merger.
Senior state officials, however, argue that the clauses cited by the ministry were designed to prevent speculative or profit-driven transfers by private players, not to restrict structural changes within government-owned entities. They say the intent behind the agreement should be interpreted differently when both entities involved belong to the state government.
“We will take up the matter with the ministry and respond to the issues raised in the letter, seeking reconsideration,” said Vishal Kumar Dev, Principal Secretary of the Energy Department, reaffirming the state’s commitment to the merger.
According to officials, the state’s upcoming communication to the coal ministry will highlight that OPGC and OCPL are both controlled by the Odisha government, and therefore, the transfer of rights within government-owned bodies does not constitute a third-party transaction.
The state believes the merger is necessary for better coordination in coal extraction and power generation, improved financial management, and simplified operational oversight. If approved, the restructuring could enable OPGC to directly manage coal production for its power plants, strengthening the state’s energy security.
With the coal ministry standing firm on legal clauses and Odisha confident about its interpretation, the issue now rests on whether central authorities will reconsider their position after reviewing the state’s justification.
