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Govt open to review decision on coal blocks de-allocation

The government is open to review its decision of cancelling allotment of coal blocks to public sector firms including power major NTPC, Coal Minister Sriprakash Jaiswal.

The development comes within a week of Coal Ministry announcing cancellation of 14 coal blocks and one lignite block alloted to steel, power, cement etc firms for captive use following their failure to meet the stipulated deadline for mining.
“If PSUs come forward with a request to review the decision of de-allocation of coal blocks, we will surely do this,” Jaiswal told reporters after a meeting to assess coal companies performance.

Any affected party including State PSUs and state governments can approach the Centre, Jaiswal said when asked whether the decision of de-allocation including that of NTPC was open to review.

On May 5, Coal Ministry had announced its decision to cancel allotment of 14 coal blocks and one lignite block to six PSUs, including NTPC, and three private firms for their failure to develop mines.

Apart from NTPC, the Ministry had cancelled blocks to DVC, Andhra Pradesh Power Generation Corporation, TVNL, Bihar State Mineral Development Corporation and Jharkhand State Electricity Board besides three private firms -- Shree Baidyanath Ayurved, Bhatia International and VS Lignite.

Country’s largest thermal power producer NTPC has already approached Power Ministry to take up the matter with Coal Ministry for review of its decision to de-allocate five blocks alloted to it.

“The power ministry has assured us that it is with us on this issue,” an NTPC official said.

Earlier, reacting to the development an NTPC official had said the company was making sincere efforts to develop the mines and under the circumstances the Coal Ministry should ensure dry-fuel allotment to it for power generation.

The ministry had deallocated five blocks — Chatti Bariatu, Chatti Bariatu (S), Kerandari, Brahmani and Chichiro Patsimal — awarded to state-run firm.
The decision to deallocate blocks had followed recommendations by a Coal Ministry panel which reviewed progress made by firms in developing 88 coal and lignite blocks, allotted for captive use.

The committee had also recommended issuing warning to 29 coal and three lignite block allocattees against any delay in bringing their blocks into production.
To weed out non-serious players, the government had last year issued notices to 84 coal and four lignite block allocattees for not developing the same within stipulated time and sought explanation as to why blocks should not be cancelled.
Earlier, reviewing the performance of coal companies including Maharatna CIL, Jaiswal said delays in land acquisition for mining projects had become a major impediment for enhancing country’s coal production.

"To overcome this, rehabilitation and resettlement policy should be more attractive and stakeholders friendly," he said.

Jaiswal said Coal India should take all steps to meet the production target of 452 million tonne for the current fiscal.

Replying to a media query after the review meeting, Jaiswal said there was no possibility of a price hike of coal post wage revision of CIL.

Why spare pvt cos & revoke our coal licences, ask PSUs

State-owned power companies whose coal blocks were taken back recently have questioned the government’s move to revoke their licences while sparing private companies.

Public sector firms, including NTPC, Damodar Valley Corporation, Andhra Pradesh Power Generation Corp and Jharkhand State Electricity Board, said they have invested huge sums in developing the mines while many private firms have not even begun preliminary groundwork.

A senior coal ministry official, however, said the decision to cancel allocations was made after a thorough evaluation.

The coal ministry recently decided to revoke licences of 14 coal blocks, 12 of which belonged to state-run companies. The blocks were de-allocated because the mines were not developed on time. But the ministry action came as a surprise because this was the first time when so many blocks were de-allocated in one go. The ministry had so far cancelled only 10 blocks but that was over several years. The blocks will now go to Coal India.

A report of a review committee headed by coal ministry additional secretary Alok Perti had recommended issuing cancellation orders to 26 firms, including private players like Tata Steel, Hindalco Industries, JSW Steel and Jindal Power.
However, coal blocks of only two private companies Shree Baidyanath Ayurved and Bhatia International have been revoked. NTPC has invested over `300 crore in the five mines which were cancelled, NTPC chairman said, adding that his company had a better record in mines development in comparison to CIL.

“The progress made by us is comparable with international benchmarks. The decision will be detrimental for the nation. We are sure to convince the ministry of coal.”

An NTPC official said the ministry was apprised at the review meeting about the issues delaying the development of the blocks. “They had appreciated and assured us that the mines would not be taken back,” he said.

Jharkhand State Electricity Board chairman Shiv Basant said, “This is an unfair decision. We would take a follow-up action soon. We got the detailed exploration conducted ourselves as CMPDIL refused to do it for us. We had told the ministry about the law and order situation. This came as a surprise to us. At least we are making efforts unlike some private companies who have not made any progress at all.”

Andhra Pradesh Power Generation Corp chairman and managing director S Bhattacharyya said the company’s board would meet shortly to decide its course of action. “We are preparing detailed project reports. Instead of taking decisions based on set milestones, the government should consider cases on individual basis,” he said.

Ministry rules say an opencast mine should become operational within 36 months while underground mines in 48 months. An additional six months is allowed if the block is in a forest.

A senior Damodar Valley Corp official said the company would approach the coal ministry seeking review of its decision. “Why should the coal blocks of private companies not be de-allocated?” he asked.

State-run Tenughat Vidyut Nigam and Bihar Rajya Khanij Bikas Nigam have also lost coal blocks.

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