CoalMin cancels linkages of 25 cos for failure to set up power plants

Furious at private sector companies failing to utilise allocated linkages for their captive power plants,the coal ministry on Friday cracked the whip by deciding to de-allocate linkages from 25 firms and warned that those idling on their coal blocks are also likely to be punished.

Written by Express News Service | New Delhi | Published: July 4, 2009 3:40 am

Furious at private sector companies failing to utilise allocated linkages for their captive power plants,the coal ministry on Friday cracked the whip by deciding to de-allocate linkages from 25 firms and warned that those idling on their coal blocks are also likely to be punished.

“Recently,Coal India Limited had reviewed old cases of captive power plants who were given coal linkages to set up their plants and enter into fuel supply agreement. It came to our notice that despite lapse of time,a large number of them did not set up plants. After due consideration,my ministry has decided (to) cancel linkages of 25 CPPs aggregating 1,292 MW involving coal requirement of 5.84 million tones per annum,” minister of state for coal Sripakash Jaiswal said.

He said in seven cases,appropriate directions have already been issued for signing of FSA whereas in 19 cases CIL has been asked to seek detailed status of the projects of certain companies,and if they were found wanting,their linkage too would be cancelled. Saying these linkages were given between 1996 to 2006,Jaiswal said “those who seek coal linkages or coal blocks must utilise the same and any failure in this connection is simply unacceptable”.

On the issue of utilisation of coal blocks,the minister said his ministry would soon begin the review of coal block utilisation by the allocatees and strict measures would be taken in the even of the users failing to utilise them. “Lot of coal block owners are delaying mining and has not taken any steps to utilise them. We need to review it,” he said.

He said his ministry would not shy away from disinvestments and was actively exploring the possibility of offloading 5-10 per cent stake in CIL. The minister did not anticipate any opposition in the process of disinvestment of CIL arguing that employees could be stakeholders.

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