Coal ministry asks Utkal Coal to expedite block development

The Union coal ministry has issued warning to Utkal Coal Ltd, a special purpose vehicle (SPV) formed by IMFA Ltd, for the inordinate delay in the development of Utkal-C coal block located in Angul district.

The ministry's warning follows a showcause notice served on the company in September 21 last year. The review committee of the ministry noted that the reasons given by Utkal Coal Ltd in its response for the delay in development of the coal block were not convincing.

Accordingly, the ministry, in a letter to the company on June 21, has directed the company to take immediate action to develop the coal block as per milestones fixed for different activities. The ministry even warned to de-allocate the coal block if the company fails to achieve the milestones in the stipulated time-frame.

However, the company claimed to have completed land acquisition and achieved Stage-I forest clearance for the project.

“We have not received any warning from the Ministry of Coal. However, we have provided sufficient explanation to the showcause notice which the ministry had issued last year. Land acquisition for the coal block is complete and we have got Stage-I forest clearance for the project. Also, our rehabilitation & resettlement (R&R) site is 95 per cent complete and we have started shifting people”, a senior official of IMFA Ltd told Business Standard.

The Utkal-C coal block was allotted to the allocatee under Section 3 (3) (a) (iii) of the Coal Mines Nationalization Act-1973 on May 29, 1998 for supply of coal to the proposed two additional Captive Power Plants (CPPs) and one existing CPP of the company at Choudwar.

In order to expedite the development of the coal blocks, various review meetings were held from time to time with the representatives of Utkal Coal Ltd. The company had earlier assured the ministry through its letter dated October 7, 2008 to complete all formalities within March 31, 2009 and that the coal would be extracted from the block from July 1, 2009. However, in the review meeting held on July 20-21 last year, it was noted that no serious efforts have been made by the company to develop the coal block, even after repeated assurances.

It was also noted by the ministry that some of the important milestones such as forest clearance, rehabilitation & resettlement (R&R) and land acquisition are still pending even though 13 years have elapsed since the allocation of the block.