New Delhi: The inter-ministerial group (IMG) on Friday reviewed the performance of seven coal blocks and recommended cancellation of at least one allotment, said officials familiar with the development.
“Seven blocks were reviewed and among them we have recommended Gourangdih ABC for deallocation,” the official said. Mint could not independently verify this. The official said the block belongs to JSW Steel Ltd and Himachal EMTA Power Ltd. They could not immediately be reached for comment.
The group will now meet on Saturday when it will review another three-four blocks.
IMG, comprising officials from the ministries of law, steel, power and finance, and the coal controller, is headed by Zohra Chatterji, additional secretary in the coal ministry. It has held several rounds of meetings at which 29 firms served show-cause notices made presentations on why they have been unable to mine coal.
Earlier this year, 58 companies were issued show-cause notices by the coal ministry asking them why they had been unable to produce coal and why their blocks should not be deallocated.
On Thursday, coal minister Sriprakash Jaiswal cancelled the allocations of four firms and encashed the bank guarantee of one of them on the recommendation of IMG.
Those cancelled on Thursday were the Bramhadih block in Jharkhand allocated to Castron Mining Ltd; Chinora and Warora (Southern Part) blocks in Maharashtra allocated to Field Mining and Ispat Ltd; Lalgarh (North) block in Jharkhand allotted to Domco Smokeless Fuels Pvt. Ltd. In the case of Marki Mangli-II, III and IV blocks in Maharashtra allocated to Shri Virangana Steels Ltd, the minister cancelled the blocks and encashed bank guarantees.
In the case of the Utkal B2 block allocated to Monnet Ispat and Energy Ltd, the company was asked to submit a bank guarantee equivalent to three years of royalty payments in a month, failing which the block may be deallocated.
Analysts said it will be difficult for the government to make sweeping cancellations as this would amount to a tacit admission that the natural resources allocation policy is faulty.
They said there was also a chance that companies may go to court as many of them couldn’t start mining as they weren’t given regulatory clearances. In a report tabled in Parliament on 17 August, the national auditor said coal block allocations had led to a notional loss of Rs.1.86 trillion.