Coal ministry asked to ensure projects not hit by SC order

To ensure that infrastructure projects are not hit by the Supreme Court's cancellation of 214 coal blocks allocation, the Prime Minister's Office (PMO) has asked the coal ministry to devise a plan to ensure end-use plants are not crippled by fuel shortages.

A coal ministry source told IANS: "The PMO has written to the coal ministry to prepare a plan of action in consultation with infrastructure-related ministries, to ensure that end-use projects are not left stranded for lack of coal supply."

Many among the coal blocks de-allocated by the apex court are captive ones for use, for instance, in steel and cement making.

Last month, the apex court cancelled 214 coal blocks allocated from 1993 to 2011, except four vested with the NTPC, SAIL and the Sasan Ultra Mega Power Project (UMPP).

An apex court bench granted six months' breathing time to mining companies to wind up their operations in the coal blocks.

The court also imposed an additional levy of Rs.295 per tonne of coal extracted from exempted or operational mines to compensate for the financial loss to the exchequer by illegal and arbitrary allotments.

The affected companies had submitted to the court that Rs.287,000 crore have been invested in 157 coal blocks and Rs.400,000 crore in end-use plants.

Earlier this month, the source told IANS that the coal ministry has sought the advice of the government's chief legal official on issues arising from the court's decision to de-allocate coal mines, like forfeiture of bank guarantees and title deeds of mines purchased by the companies.

"Depending on the advice of the attorney general, the ministry will take a view on an ordinance to deal with the implications of the Supreme Court order," the source said.

Financial Services Secretary G.S. Sandhu earlier said banks will approach the Reserve Bank of India for restructuring coal assets after the Supreme Court order that may impact such assets' quality.