Govt gets tough on cos idling on coal blocks

Un Tata Steel, Jindal Steel and Power (JSPL), GVK Power, Essar Power, MMTC Ltd and NTPC Ltd face the threat of cancellation of their captive coal block allocations. The coal ministry has decided to issue showcause notices to various companies for not making sincere efforts for the development of these blocks in the past several years.

The move comes following a recent high level meeting wherein the ministry brass found that the allocatees have been delaying production on one pretext or the other.
“We will not tolerate lessees idling on their blocks continuously for reasons which are unacceptable. After a review meeting on July 21 we have decided to show cause 93 companies, whom we found were idling on their blocks. We can't allow the situation to continue like this. There will have to a credible reason why a particular block can’t be developed,” Coal Minister Sriprakash Jaiswal said. He said his ministry has also decided to show-cause four lignite block holders and warned seven UMPP builders for the same reasons.

A perusal of the 93 companies who have been show-caused, 45 were state-run entities while the remaining 48 were private firms.

Jaiswal said the Centre allocated 207 blocks anticipating a production of 350 million tonnes per year, but only 26 blocks have commenced production, belying expectations of any substantive gains from them. The Planning Commission is already worried that in the 12th Plan the country may face acute coal shortage as no coal was already available for the 28,000 MW of linkages granted till November 2008, while applications for coal supply for another 1, 00,000 MW were pending with the Power Ministry. According to the ministry, the total coal demand was currently around 654 million tones. But production from all sources including navratna behemoth Coal India Limited would be around 572.37 million tones, thereby leaving a gap of nearly 82 MT this fiscal. So production from the blocks will have to begin to bridge the supply deficit to the extent possible.

The National Thermal Power Corporation (NTPC) has emerged as the biggest defaulter among the PSUs who have failed to deliver on their blocks. The maharatna company was allocated five blocks- Pakri Barwdih (given in 2004), Chhatribariatu, Kerandari and Talaipalli (all 2006) and Chhatri Bariatu (S). Among other major defaulting PSUs are Damodar Valley Corporation (3 blocks), Jharkhand State Mineral Development Corporation and APGENCO.

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