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Govt de-allocates 4 coal blocks
Girja Shankar Kaura/TNS

New Delhi, September 13
Showing its resolve to come down hard on the private companies who have not made any progress on the coal blocks allocated to them, the government today decided to de-allocate four such coal blocks while taking punitive action against four others.

The eight coal blocks are with five private companies and form part of the 29 coal blocks whose progress was reviewed by the inter-ministerial group (IMG) on coal on three days from September 6-8.

1st round of action

Bank guarantee of 3 to be encashed

1 asked to submit bank guarantee within month

Notices for no progress had been issued to 58 blocks

Review of 29 blocks was carried out

The IMG will meet on Friday to prepare a report on the remaining 21 blocks

The action comes in the wake of the allegations from the Opposition that the government implemented a coal policy that provided windfall benefits to private players and cost the country thousands of crores of rupees.

An official statement issued by the Ministry of Coal said, “The IMG on coal has recommended de-allocation of four coal blocks. The recommendations have been accepted by the government.”

The IMG also recommended that the bank guarantee (BG) of three others private companies be encashed as they had failed to develop the mines even though several years had passed since these had been allotted.

In another case where there was substantial progress, but no provision for BG, the IMG recommended that the allottee may be asked to submit BG amounting to three years royalty within a period of one month from date of letter in this regard failing which the block may be deallocated.

The first round of action on eight of the 29 blocks reviewed came today after the IMG meeting yesterday. The meeting stretched late into the night and after a full report was prepared. Following this, the IMG sent its recommendations to the Coal Ministry today.

The IMG will meet again tomorrow to prepare a report on the remaining 21 blocks. Action against more private companies and more coal blocks could be recommended to the beleaguered Coal Ministry that has been on the back foot for the past few weeks after the Comptroller and Auditor General (CAG) came out with the report that there had been a loss of Rs 1.86 lakh crore to the national exchequer due to the allocation of these coal blocks.

As many as 10 more cases are expected to be taken up at tomorrow’s meeting. Show-cause notices for no progress on the coal blocks had been issued to a total of 58 blocks of which review of 29 blocks was carried out over the three days with the representatives of these private companies making presentations in front of the IMG headed by Additional Secretary Coal Zohra Chatterji.

Coal Minister Sriprakash Jaiswal said, “On the basis of the performance of coal blocks, the IMG has given its recommendations and we have accepted these”.

The minister added that the ministry had allocated coal blocks so that the country could get maximum power but some companies couldn't perform up to the mark.

De-allocation has been recommended for Castron Mining Ltd, Field Mining and Ispat Ltd and Domco Smokeless Fuels Pvt Ltd. While Castron Mining Ltd and Domco Smokeless Fuels Pvt Ltd have one block each at Bramhadih and Lalgarh (North), respectively, Field Mining and Ispat Ltd owns two blocks at Chinora and Warora (southern part).

Coal Ministry officials said that deduction of BG would be in case of Marki Mangli-II, III and IV blocks allocated to M/s Shri Virangana Steels Limited.

The IMG also recommended that in the case of Utkal B2 block allocated to M/s Monnet Ispat & Energy Limited, where there was substantial progress but no provision for BG, the allottee may be asked to submit BG amounting to three years royalty within a period of one month from date of letter in this regard, failing which the block may be de-allocated.