For the power and steel companies struggling to meet their fuel requirements, the problem might get bigger. Following the recommendations of a review committee headed by additional coal secretary, the coal ministry has started issuing show-cause notices to companies that have failed to develop the allocated captive coal blocks.
Among the first ones that have been warned of cancellation of coal blocks are Arcelor Mittal (India) and GVK Power, Jindal Steel and Power, Hindalco and Sasan Power.
One of the major criteria in allocation of captive coal blocks is that the allottee needs to commence the operations of an open-cast mine within 36 months (42 months in case the area is in forest land) and an underground block in 48 months (54 months for forest land) from the date of allocation.
The companies are required to submit their mine development and end-project schedules to the coal ministry with in three months of coal block allocation.
Most of these companies have already crossed the limit of 36 months. The review committee-headed by the additional secretary coal, had in March said that there were 58 blocks allocated to companies including Sasan Power, Tata Sponge Iron, Orissa Mining Corporation, Andhra Pradesh Mineral Development, Electrotherm and Electrosteel Castings, that have not been developed and therefore, the allocatees should be served with show-cause notice to explain why the block should not be de-allocated.
While the coal ministry did sent two-three notices last month, the numbers of such notices have zoomed from this month.
On Thursday alone, more than 10 companies were issued show-cause notice. The ministry has given them 20 days to send their replies on ?why the delay in the development of coal block should not be held as violation of the terms and condition of the allotment.? Failing which, it would take an appropriate action.
