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The Union Coal ministry, in June 2013, issued 23 more show-cause notices to Captive coal block allottees asking them to give reasons for delay in development of coal blocks allocated to them. These include public sector enterprise like NTPC and private companies like JSPL, GVK Power, Monnet Ispat etc.
The Union Coal ministry has asked the companies to reply within 20 days. Failing to do so would result in de-allocation of coal blocks bagged by them. The Captive coal blocks which face de-allocation threat include NTPC’s Tallaipalli coal block in Chhattisgarh and JSPL’s Utkal-B1 coal block in Odisha.
According to the information released by the inter-ministerial group (IMG) of the total 195 coal blocks allocated to both public and private firms, only 30 mines had begun production. The IMG on Coal was constituted in June 2012, for the periodic review of the development of coal blocks and make recommendations on action to be taken, including de-allocation if required.
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Coal Blocks Allocated to Private Companies |
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Sector |
No. of coal blocks
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Geological Reserves
(GR) in MT
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Power |
27
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4,974
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Iron & Steel |
61
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8,671
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Cement |
6
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629
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Small & Isolated |
3
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27
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Coal to Liquid (CTL) |
3
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3,000
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Total |
99
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17,301
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In 2012, the Coal ministry issued show-cause notices to 58 coal block allottees and de-allocated more than 10 coal blocks including the Bhushan Steel’s New Patrapara block in Odisha. So far, the Ministry has de-allocated a total of 47 coal blocks mainly on account of lack of progress of development of the blocks.
The failure of the Coal India Ltd to produce enough coal to meet the growing demand from the Steel and Power sectors, in 1993, the Coal Mines (Nationalisation) Act, 1973 was amended for allocating Captive coal blocks to private companies engaged in production of iron and steel, power generation and washing of coal. The reform measure was also expected to bring in huge private investment into this sector.
However, failure of the allottees in commencing coal production within the scheduled time not only made the privatisation policy a non-starter but the ways and means adopted to allocate coal blocks to private companies came under the scanner of the Comptroller and Auditor General of India. In its report on ‘Allocation of Coal blocks and Augmentation of Coal Production’ released on August 17, 2012, the CAG accused the government of causing huge loss of around Rs 1.86 lakh crore to the national exchequer.
The Auditor General felt that the government should have followed the competitive bidding route for allocation of coal blocks. According to the CAG report, the discretionary allotment of coal blocks to private companies led to allegations of corruption against private companies like JSPL, which has been allotted 7 coal blocks with total geological reserves of 2341.04 million tonne.
The coal production figures clearly indicate the failure of the privatisation policy. As of April 2013, the coal ministry had allocated coal blocks with geological reserves of 50 billion tonne. Even after the de-allocation of 25 blocks, the privatised capacity of coal block stood at 44.23 billion tonne. As against this, the coal production from these sources stood at a meagre 36.8 million tonne in 2012-13, which is about 7 per cent of the total coal production of 557.5 MT.
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