Government may cancel 80% of controversial coal permits

More than 50 of the 60 coal blocks being reviewed by an inter-ministerial group (IMG) for inordinate delays face the risk of de-allocation if the projects are unlikely to kick off before 2013. HT reports. Right to silence is not available to PM: BJP | Govt, Oppn coal war heats up | Dousing the coal fire

More than 50 of the 60 coal blocks being reviewed by an inter-ministerial group (IMG) for inordinate delays face the risk of de-allocation if the projects are unlikely to kick off before 2013.

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This includes the possible cancellation of mining rights of seven captive coal blocks given to private companies during the BJP-led NDA’s rule between 1999 and 2004, top sources told HT.

The IMG, headed by additional secretary (coal) Zohra Chatterjee, began scrutinising the responses given by companies for delays in mining in the 60 coal blocks. The bureaucrats’ panel will meet on September 6, 7 and 8 to finalise the norms for cancellation of the blocks.

Sources told HT the IMG discussed the implications of recommending cancellation of all blocks that are unlikely to produce coal before 2013 and hand them over to state-owned Coal India Limited (CIL) for development.

To compensate the regulated sectors, such as power plants, set up on the basis of these blocks, the IMG may recommend signing fuel supply agreements with CIL. “This will ensure the developers don’t get affected, investments in end-use plants do not get stranded and investor sentiment is not affected,” a source said.

The other sectors can always retain the option of participating in competitive bidding for coal blocks or importing coal to fulfil their requirements, the source added.

The IMG has also firmed up guidelines for proportionate deduction of bank guarantees from promoters of such companies for failure to achieve milestones for the development of coal blocks, a coal ministry statement said.

The IMG, which will give its final recommendations by September 15, may also give the companies another opportunity to explain the project delays.

Contrary to the BJP’s demand, the government has ruled out an immediate blanket de-allocation of the coal blocks without assessing the reasons for the delay. “Two investigations are on — by IMG and the CBI. So there is no question of ordering an immediate cancellation,” coal minister Sriprakash Jaiswal told HT.