NTPC told to give reason for not providing BG for mine development

Stating it has not received any information from state-owned NTPC with regard to submission of Rs 138.6 crore as bank guarantee for delays in developing mine in Jharkhand, the Coal Controller has asked the power PSU to give reasons for the same.

This follows NTPC requesting the Coal Ministry to consider waiver of the amount as its block is at an advanced stage of development.

"Ministry of Coal has directed NTPC to furnish bank guarantee for an amount of Rs 138.6 crore in respect of Pakri Barwadih coal block (in Jharkhand...We have not received any information regarding submission of bank guarantee so far," Coal Controller said in a latest letter to NTPC.

"You are therefore, requested to furnish reason for not submitting bank guarantee," the letter said.

Coal Controller is the statistical authority under the ministry of coal and calculates the amount to be imposed as bank guarantee on any mine allocatee for delays in mine development.

NTPC had earlier "requested Ministry of Coal to consider waiver of imposition of Bank Guarantee (BG) to the extent of Rs 138.6 crore as recommended by 23rd IMG (Inter-Ministerial Group) held on 24th and 25th October' 2013 since the block is at an advanced stage and the delay in the start of coal production is beyond the control of NTPC", according to an official document.

Pakri Barwadih coal block in North Karanpura coalfields of Jharkhand was allocated to NTPC in October, 2004. The mine has estimated geological reserves of 1,600 million tonnes.

"...NTPC stated that all the milestones like mining plan, mine closure plan, environment clearance, forest clearance, land acquisition and coal controller permission for the coal block have been completed," the official document said.

"The reasons for non-commencement of the coal production despite all the clearances can be attributed to lack of support of government of Jharkhand," it added.

The decision to impose the BG was taken following the recommendation of the IMG on coal blocks.

"IMG recommends imposition of Bank Guarantee on the allocatee (NTPC) in order to expedite the development and production from coal block (Pakri Barwadih mine in Jharkhand," the coal ministry said in a letter dated February 13 to the Chairman and Managing Director of PSU.

The government had formed the IMG in 2012 to review the progress of coal blocks allocated to firms for captive use and recommend action, including de-allocation.

The panel under the chairmanship of Additional Secretary in the Coal Ministry has members from other ministries, including steel and power.