Coal ministry deducts BG of Jindals, MCL

The ministry has decided to deduct BG to the extent of Rs 22.24 cr as calculated by the Coal controller's office

The coal ministry has decided to deduct bank guarantee (BG) of the companies which were allocated the combined Utkal-A and Gopalprasad (West) coal block for slippages in achieving key milestones.

The ministry has decided to deduct BG to the extent of Rs 22.24 crore as calculated by the coal controller’s office. The coal block was allocated jointly to Mahanadi Coalfields Ltd (MCL), JSW Steel Ltd, Jindal India Thermal Power Ltd (JITPL), Jindal Stainless Ltd (JSL) and Shyam DRI Power Ltd.

The BG deduction is as per the recommendation of the inter-ministerial group (IMG), mandated to review the progress of development of allocated coal blocks and associated end-use projects and recommend action, including de-allocation, if required. The IMG considered the terms and conditions of allocation, the showcause notice issued earlier and the reply along with the presentation made by the allocatee and the status paper placed before it. The IMG observed that it is a fully explored coal block and seven years have elapsed from the date of allotment on November 29, 2005.

Time slippages ranging from two to five years was noticed in major milestones like BG, mining lease application, submission of mining plan, approval of mining plan, grant of forest clearance and completion of land acquisition. The block was allocated for the end-use plant of the respective companies except in case of MCL where it was allotted for commercial use.

The joint venture (JV) company formed for the development of the coal block has spent Rs 71.30 crore. Besides, the co-allocatees have also invested significantly on their end-use plants. While JSW Steel has reported an investment of Rs 25,474 crore, JSL has invested Rs 8,685.86 crore and Shyam DRI has invested Rs 705.91 crore.

The JV company has applied for environment management plan (EMP) clearance and forest clearance. Regarding land acquisition, notification under Section 11 (1) has been completed for Gopalprasad (West) and Section 4 (1) notification completed for Utkal-A. Acquisition of 423 acres of government land and 126 acres of tenancy land is through. Public hearing for environment clearance has been completed and forest clearance proposal has been submitted to the state government after completion of gram sabhas in 10 villages.

The Gopalprasad (West) and Utkal-A combined coal block was allocated in November 2005 on the condition that 60 per cent of the annual production from the mine will be retained by MCL and the remaining 40 per cent would be shared between the other co-allocatees.