Govt rejects IMG's recommendation to deallocate coal mine

The government today said it has rejected the recommendation of an inter-ministerial group (IMG) to deallocate a coal block in Jharkhand jointly allocated to two PSUs.

"In view of the critical deficit position in the state (Bihar) and low per capita consumption of power...The recommendation of IMG to deallocate Urma Paharitola coal block has been not accepted by the government," the Coal Ministry said.

This was stated by the Ministry in a letter dated April 12 to the two companies -- Jharkhand State Electricity Board and Bihar State Mineral Development Corp -- which were jointly allocated the coal mine.

The Ministry, in the letter, directed the firms to expedite the development of the coal mine within a period of 36 months.

The Inter-Ministerial Group (IMG) had last year recommended that the coal mine may be deallocated in view of the continued unsatisfactory progress in the development of the mine. The panel also recommended that 50 per cent of the bank guarantee (BG) may be forfeited.

The letter further said that "recommendation of the IMG was made...And submitted for consideration. However, it has been observed that in principle approval for the grant of tapering linkage was conveyed to the government of Bihar linked to Urma Paharitola. The matter has been reexamined in light of this".

The IMG, under the Chairmanship of Additional Secretary, coal was set up to review the progress of development of allocated coal blocks and associated end use plants and to recommend action, including de-allocation, if required.