CoalMin to deduct bank guarantee for delay in mine development
To fast-track the development of captive coal blocks, the government has finalised a policy for deduction of bank guarantees of mine holders if they do not start production from allotted mines within the stipulated time frame.business Updated: Aug 10, 2012 19:41 IST
To fast-track the development of captive coal blocks, the government has finalised a policy for deduction of bank guarantees of mine holders if they do not start production from allotted mines within the stipulated time frame.
"The coal ministry has framed guidelines on bank guarantee deduction. To begin with, the ministry will deduct the bank guarantee of 18 firms which have delayed the production from the captive mines allocated to them," a source close to the development told PTI.
The policy was finalised in the last meeting of an inter-ministerial group held recently, the source added.
The firm allocated mine for captive use is required to submit a bank guarantee equivalent to one year's royalty amount payable based on the final peak capacity of the mine and the weighted average royalty.
The development follows the Prime Minister's Office asking the coal ministry to fast-track the process of taking back captive coal blocks which have not been developed in stipulated time.
In May last year, the review committee on coal blocks deallocation, under the chairmanship of Coal Additional Secretary, had recommended deduction of bank guarantees in case of 15 private firms for failing to achieve commencement of production as per allotment norms.
However, another source said that later it was discovered by the coal ministry that the then policy guidelines actually did not permit deduction of bank guarantees. So, a general consensus was reached in the ministry that the policy guidelines on the same should be made.
The panel, then had also recommended to cancel allotment of 14 coal blocks and one lignite block to six PSUs, including NTPC, and three private firms for failing to develop mines.