The Coal Ministry has decided to de-allocate four coal blocks to punish companies that failed to develop them. Among the coal permits that stand cancelled are two assigned when the NDA coalition, led by the BJP, was in power.
The cancellations today come amid allegations that the government's policy on coal allowed private players to get undue benefits worth 1.86 crores, an estimate reached by the national auditor but refuted by the Prime Minister. The report of the auditor or CAG was presented last month, forcing the government on the defensive and emboldening the opposition to demand Dr Manmohan Singh's resignation.
The recommendation to revoke coal permits was made by an inter-ministerial group (IMG) which is studying 58 companies, public and private, who were sent notices by the government in April for failing to meet deadlines for different phases of development in their coal blocks. Some are still years away from being able to mine and were sent notices in April. The IMG met representatives of 29 private firms last week to hear their defense. Today's recommendations are the first offered by the IMG since it was set up in July.
The companies whose coal blocks will be taken away include Castron Mining Limited, Fieldmining and Ispat Limited, which were given coal blocks in 1999 and 2003 respectively by the NDA government that was led by the BJP.
A third firm whose coal permit is being revoked is DOMCO Smokeless Fuels Pvt. Limited.
The penalty for a company named Shri Virangana Steels Limited is surrendering a portion of the bank guarantee it provided when it filed its application.
The review committee says another firm - Monnet Ispat and Energy Limited - has made substantial progress in the coal block it was given but did not provide a bank guarantee and will now have to submit three years' royalties within a month or lose it coal block.
In its report, the auditor or CAG said coal fields should have been auctioned. The government responded that earlier laws did not allow for a competitive bidding process, and that the extensive process required to change policy would have hurt industrial development and the economy.
Its defense has been somewhat punctured by the fact that a long list of firms that got coal fields at a fraction of their true worth then failed to begin mining. While the inter-ministerial group is looking at companies guilty of squatting, the CBI has begun filing cases against firms and their executives who misreported their finances and technical expertise to corner coal blocks.
The Coal Ministry has decided to de-allocate four coal blocks to punish companies that failed to develop them. Among the coal permits that stand cancelled are two assigned when the NDA coalition, led by the BJP, was in power.
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