Sanchetiís Bhatgaon coal blocks cancelled

Dec 03 2012, 03:57 IST
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SummaryThe Coal Ministry has cancelled the allocation of the controversial Bhatgaon-II and Bhatgaon-II Extension coal blocks that were allotted to Chhattisgarh

The Coal Ministry has cancelled the allocation of the controversial Bhatgaon-II and Bhatgaon-II Extension coal blocks that were allotted to Chhattisgarh Mineral Development Corporation. The CMDC has denied any irregularity and said it was considering moving court against the ministryís decision.

Acting on the advice of Inter-ministerial Group, the ministry has noted that the corporation could not begin mining even five years after the allotment. The ministry ordered the forfeiture of 50 per cent of the bank guarantee, Rs 1.59 crore, of the company. The IMG noted that the company gave misleading information to the collector and coal controller about the amount invested.

Bhatgaon blocks, located in Surajpur district of Chhattisgarh, have been at the centre of a controversy after the corporation formed a joint venture with BJP Rajya Sabha MP Ajay S Sanchetiís firm, SMS Infrastructure Ltd, to mine coal from these blocks. The Congress alleged that the state BJP government had formed the joint firm to provide illegal benefits to Nagpur-based Sancheti, considered close to party president Nitin Gadkari.

The CAG had observed irregularities in the tender process as the corporation had found only SMS Infrastructure eligible for Bhatgaon-II Extension even though it quoted a very small amount. Noting that allocation had caused a loss of Rs 1052.2 crore to the exchequer, the CAG added, ďThe corporation should have either invited fresh tenders or postpone the date of opening tenders.Ē

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