Coal ministry warns de-allocation of blocks for lack of progress

Written by Sanjay Jog | Mumbai | Updated: Sep 13 2009, 02:28am hrs
In a tough stand against the non-compliance by allottees of coal blocks, the coal ministry has served showcause notices to Andhra Pradesh Power Generation Corporation, Chhattisgarh Mineral development Corporation, Orissa Mining Corporation and Bihar Rajya Khanij Vikas Nigam.

The ministry has warned that it will de-allocate the coal blocks for delay in their development as it would be held as violation of terms and conditions of the allotment of blocks. The ministry has asked the allottees to reply within a fortnight.

The ministry has also served showcause notices to Sunflag Iron & Steel, Rungta Mines and AMR Iron & Steel for delays in the submission of bank guarantee. These companies were supposed to submit a bank guarantee within three months from date of issue of the allocation letter.

The companies have been asked to reply within a fortnight or face action for their non-compliance.

The coal ministry sources told FE, It was found that the progress was very slow and in some cases and no serious effort was made to develop the coal block. The milestones such as environment clearance, land acquisition, installation of end use project are still pending.

Sources informed, as of now, 198 coal blocks with geological reserves of about 42 billion tonne have been allocated to various public and private sector companies under the captive route. So far just over 20 of these blocks are under production.

As per rules for captive mining, opencast mines and underground mines have to be brought under production within 36-54 months. The ministry had issued similar notices in June to about 14 companies for lack of any progress in the development of coal blocks.

In case of Andhra Pradesh Power Generation Corporation, the coal ministry cited that as per the companys commitments the coal production was promised to commence from 2009-10. However, it was noticed that there had been no much progress except purchase of geological report and mining plan approval.

As far as the Chhattisgarh Mineral Development Corporation, the ministry found that the company has not adhered to the milestones/time lines set out by it and no serious effort was seen for developing the coal block. Besides, the issues such as forest clearance, environment clearance, mining lease and land acquisition are still pending despite the block was allocated on August 14, 2003. The overall progress is highly dissatisfactory.

Moreover, the ministry asserted that the progress by the Orissa Mining Corporation for implementation of the Utkal-D coal block was badly delayed. It was further noticed that the company has not made any efforts to develop coal block since the allotment in 2003 and the gestation period of three-and-half years to develop the explored block was over.