Coal ministry sends notice to eight firms for failure to develop coal blocks

Seeks clarification from Tata Steel, JSW, Bhushan Steel

The coal ministry on Tuesday issued show-cause notices to eight companies, including Aditya Birla Group’s Hindalco, and sought clarification from five others, including Tata Steel, JSW and Bhushan Steel, for their failure to develop captive coal blocks.

The ministry also rapped the Power Finance Corporation (PFC), the power ministry’s arm managing the bidding of ultra mega power projects (UMPPs), for the delay in development of three blocks allocated to PFC for Odisha UMPP in 2006. The three blocks could not be developed as the bidding for the UMPP had to be deferred due to framing of new guidelines.

“You are called up on to show cause why the block should not be de-allocated failing which it would be presumed that your company has no explanation to offer and action would be taken for de-allocation of the coal block,” the ministry said in its letter to Hindalco, Mahanadi Coalfields and Neyveli Lignite (NLC). The three firms were allocated Talabira-II and III blocks in 2005.

The Talabira-II block was in the news recently after the Central Bureau of Investigation (CBI) registered an FIR against industrialist Kumar Mangalam Birla, along with former coal secretary P C Parekh, for alleged criminal conspiracy and abuse of official position in its allocation.  

Tata Steel faced the ministry’s ire for Kotre Basantpur and Pachmo blocks in Jharkhand. The ministry sought justification from JSW Steel, Bhushan Steel and Jai Balaji Industries for the Rohne coal block in Jharkhand jointly allocated to them in 2008.

The ministry had last week cancelled a block allocated jointly to Jindal Steel and Power (JSPL) and Monnet Ispat & Energy Ltd of reserves.

The government had allocated 218 captive coal blocks with reserves exceeding 49 billion tonne in 1993. The ministry has cancelled licences of 51 coal blocks over the past two years, on the basis of recommendations of an inter-ministerial panel that found the development efforts by corporates severely wanting.

The de-allocation drive comes amid rising coal imports to meet the domestic shortfall that touched 135 mt last financial year and allegations of corruption against the government in allocations.