Coal ministry asks AP Genco to explain delay in block development

Coal ministry asks AP Genco to explain delay in block development

Hyderabad: The coal ministry has asked the Power Generation Corporation of Andhra Pradesh (AP Genco) to explain why there was an inordinate delay in development of coal blocks allotted to it more than two years ago.

The ministry gave 15 days time to AP Genco to explain why delay in development of the coal blocks should not be treated as violation of the terms and conditions of the allotment.

The notice, signed by under-secretary V.S. Rana, cautioned that the ministry would take appropriate action, including de-allocation of the blocks, if the Genco did not respond and give a satisfactory reply.

The notice was also sent to chief secretary P. Ramakanth Reddy on 15 October, official sources informed.

Genco was allotted Anesattapalli and Punukulla Chilk coal blocks in February 2007, and Penegadapa block in May 2007.

Since then, many review meetings were held between the ministry and the Genco officials and following one such meeting on 25-26 March, 2008, that the former issued the first show-cause notice to the latter over delay in development of the blocks.

A senior official of AP Genco, when contacted, said that they had communicated to the ministry that they were in the process of conducting a study on whether these coal blocks were viable as they were located in a total forest area.

“These are underground mines and we have to see the viability before taking up development. If these blocks are found not viable, we will surrender them," the official pointed out.

The notice said that Genco did not respond to the show-cause notice but instead wrote a letter on 8 July, 2008 indicating that it was interested in developing the coal blocks and would submit necessary bank guarantees by the end of July 2008. In a review meeting held on 22-23 June, 2009, it was noticed that except the submission of bank guarantees all activities are pending as per the milestone chart.

All the required statutory clearances and also land acquisition for development of the coal blocks were still pending. The Genco does not seem to be interested in developing these coal blocks, the notice added.

In spite of passage of more than two years, no serious effort has been made by Genco to develop the coal blocks. The progress is not satisfactory, it noted.

The allocation was liable for cancellation since the progress in implementation of end-use (sponge iron and power plants) and progress in development of coal mining project was unsatisfactory, it said.