Coal ministry slaps show-cause notices on 12 firms including NTPC, SAIL

The development comes close on heels of the coal ministry issuing show-cause notices to 11 firms, including JSPL, Monnet Ispat, NTPC and GVK Power last week for not developing the mines allotted to them for captive use

Taking forward its crusade against companies sitting idle on mines, the coal ministry today slapped fresh show-cause notices on 12 firms including NTPC and SAIL seeking explanation for not developing these by 30th June, failing which the blocks could be de-allocated.

 

“You are hereby called upon to show cause, on each milestone separately, to this ministry within a period of 20 days… as to why the delay in the development of the coal block should not be held as violation of the terms and conditions of the allotment... failing which... action as appropriate would be taken against your company for de-allocation,” the ministry said in the notices to firms today.

 

The development comes close on heels of the coal ministry issuing show-cause notices to 11 firms, including JSPL, Monnet Ispat, NTPC and GVK Power last week for not developing the mines allotted to them for captive use.

 

Apart from NTPC and SAIL, which were issued show-cause notices for failing to develop Talaipalli block and Sitanala Coking Coal block, the firms which were issued notices included TVNL, Damodar Valley Corporation, Bhushan Steel and Power, West Bengal Power Development Corporation and Madhya Pradesh and Maharashtra State Mining Corporations.

 

Other firms which were served notice included Abhijit Infrastructure, Rungta Mines, OCL India and Ocean Ispat.

 

The coal ministry said while NTPC failed to commence power generation from Talaipalli block allotted to it in January 2006 by March 2012 as scheduled, SAIL failed to meet the milestone of developing Sitanala block.

 

The notices to firms were issued for 12 blocks including Gondulpara, Jamkhani, Brinda, Sasai, Meral, Radhikapur (West), Gangaramchak, Gangaramchak Bhadulia, Marki Barka and Warora coal blocks allotted between June 2003 and July 2007.

 

“One of the conditions of allocation was that coal production from captive block shall commence within 36 months in case of opencast mine and in 48 months in case of Underground mine from the date of allocation letter,” the ministry said in its notices to firms.

 

It said after their progress was found unsatisfactory in review meetings, an Inter-Ministerial Group (IMG) was constituted in June 2012 to look into the issue.

 

It added that the IMG in its meeting on 1st May found “no significant progress in development of coal block” and “noticed that a number of important /critical milestones are pending.”

 

The ministry also sought a detailed status note on the progress of end use plant by the companies which were allotted mines.

 

As per coal ministry officials, the IMG had decided that show-cause notices would be issued to 30 coal block allottees.

 

The crackdown is part of the government’s exercise to ensure that the allocated blocks do not remain unproductive.

 

Last year the Comptroller and Auditor General of India (CAG), in a report, had estimated likely financial gains to the tune of Rs1.86 lakh crore to accrue to private firms which were allocated coal blocks without auction.

 

The captive coal block allocation issue has also taken political overtures while CBI is also investigating it.

 

Last year, in a similar exercise, the government had issued show-cause notices to 58 coal block allottees and de-allocated blocks of some developers. It also deducted bank guarantees for some others.

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