17 firms threatened with coal block cancellation

Top firms include Tata Steel, Sterlite Energy, GMR Energy.

The Union government has threatened to cancel coal block allocations of as many as 17 companies for failure to develop those allotted to them years before. These include big companies such as Tata Iron and Steel, Sterlite Energy, GMR Energy, ArcelorMittal India, Reliance Energy, GVK Power, Lanco Group and Rungta Mines.

The ministry has issued separate showcause notices asking the reasons for the delay, to be replied to within a month. The notices, served on November 3 and 4, ask why the delay should not be held as violation of the terms of allotment and in case of delay in replying, “it would be presumed that your company has no explanation to offer and action would be taken for de-allocation”, said each notice.

Tata Iron and Steel has been served the notice for delays in developing the Kotre Basantpur and Pachmo coal blocks in Jharkhand. The company was allotted the two blocks in 2005 for supply of coal to its steel plant at Jamshedpur.

“It is seen that the company has repeatedly failed to keep its promises made on earlier occasions and is thus non-serious about timely development of the block,” the notice states.

A similar notice has been served to Reliance Energy, GMR Energy, Arcelor Mittal India, Lanco Group, Navbharat Power and Sterlite Energy. The six companies were jointly allotted the Rampia and Dip Side of Rampia coal block in Jharkhand in January 2008 for meeting the captive coal requirement of their end-use projects. In a review meeting this July, the decided the companies had made no serious effort to develop the block.

An e-mail sent to Reliance Energy for comments on the development went unanswered.

Hyderabad-based GVK Power has been pulled up for the delay regarding the Seregarha coal block in Jharkhand, jointly allotted to it along with Arcelor Mittal India in 2008 for meeting the coal requirement of their captive power plants.

GVK Group, however, has blamed the state government for the delay. “The state government has not yet given mining lease (ML) approval for the block. That is why drilling could not be started. Until we start drilling, how can the block be developed?” asked a senior official from the group.

A notice has also been slapped on Rungta Mines, OCL India Ltd and Ocean Ispat Ltd for the slow progress in development of the Radhikapur-West block, jointly allotted to them in 2006 for supply of coal to their sponge iron, captive power and cement plants.

Tata Sponge Iron Ltd, Scaw Industries Ltd and SPS Sponge Iron Ltd have been issued a similar notice on the Radhikapur-East block jointly allotted to them four years before. Other companies pulled up include Bihar Sponge Iron Ltd for slow progress on the Macherkunda coal block in Jharkhand, Mideast Integrated Steels Ltd for Tandsi-III and Tandsi (Extn) coal blocks and Andhra Pradesh Power Generation Company Ltd (APGCL) for delays in the Tadicherla-I block in Andhra Pradesh.

The ministry has prepared a list of 93 captive coal blocks where development has not been satisfactory and is currently in the process of threatening the holders with de-allocation through showcause notices. Since September 22, it has issued similar notices to at least 50 such firms.