Will submit add'l documents for clearance to Australia: GVK

One stock that is in focus is GVK over concerns on what has been happening over the much-hyped acquisition of Australia’s Alpha coal mine. Australia’s environment minister Tony Burke had said the government has put on hold approval of the environmental clearances given to the project by the Queensland government on May 29.

Vital to GVK’s coal ambitions, the conglomerate already has officials working with the federal government in an expedient manner to facilitate the final assessment of the project. The company is confident a decision can be made ahead of its planned final investment decision on the Alpha project later this year.

GVK has invested in three mines (Alpha, Alpha West and Kevin’s Corner) with total resources of 8 billion tonne of thermal coal, in addition to rail and port facility.

Sanjay Reddy, the vice chairman of GVK Infra and the director of GVK Power says the company will provide the additional documents to the federal government for the environmental clearance and expects a positive outcome soon.

Under bilateral agreements, any project has to get an okay from both the federal and state governments in Australia. The government of Queensland last week gave the go-ahead for GVK's Alpha project in a move that would normally trigger a 30-day deadline for approval from the national government.

But Burke had said the new state government was "shambolic" and that its approval fell short of national standards.

Below is an edited transcript of his interview. Watch the accompanying video for more.

Q: Where do things stand in terms of this environmental clearance issue? Is it an issue that may require some kind of payment of dues from GVK or is it going to become a litigation issue to be finally resolved?

A: First of all it has nothing to do with litigation or dues or anything like that. In Australia, there are two environmental clearances that are required, one is from the state government, which is Queensland and the second is from the federal government. These two clearances are independent clearances and are not connected. It used to take a lot of time in the past in Australia. So what the governments - the federal government and state governments did was they came to an agreement that they will have a coordinated effort.

They then signed an agreement which was a streamline process, which basically meant that once the state government gives the clearance, they will also keep the federal government informed and then the federal government only will look into areas where they feel there were gaps. So therefore the process will be much more streamlined and much faster.

As far as we are concerned, we have done everything that is required from the environmental perspective and we are extremely happy that the Queensland government last month as per the original schedule has given the approval on time. However, there have been differences between the state and the federal government in relation to the particular agreement that they have as to how to streamline the process because they are two separate political parties.

So what the federal government decided is it will ‘stop the clock’. When they mean by stop the clock is it will stop the clock on the process between the state and the federal government and said they will deal directly with us. We are already dealing directly with the federal government for the last few years. Even yesterday we had a pre-arranged meeting with them and the meetings are going exceedingly well. Even Tony Burke, the environment minister himself has commented saying that the relationship with GVK is extremely good and we don’t see any problem in terms of the way we are working with them.

So this frankly is less to do about the project and this is a difference between the state and federal. Of course we are in between but I am very confident, based on even yesterday’s meeting, that we will get the environmental clearance as per the original plan with the federal government.

Q: When do you think this federal government clearance will come through? When do you see the project going on floors?

A: We have three parts of the project - one is the coal mine, the second is the railway line and third is a port. As far as the coal mine and railway line are concerned, the approval was given last month by the state and as per its streamline process, the federal government is supposed to give the approval within one month. So that would be by the end of June. But we expect that because of these things, it may be a few weeks here and there. We expect the approval to come by June or latest by July.

The second thing is we need environmental clearance for the port, which is also on track which has to be given by the federal government. We had an agreed schedule with them. In Australia, you negotiate a timeline for approvals. So going by past history that they have kept up the timeline, we had agreed that by September we will get the port approval, which is very much on track.

We believe that if by September if we get the approval and all other aspects of the projects are going exceedingly well then we think we should be able to achieve financial closure by the end of this year i.e. December and start construction by January next year.