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Companies may lose coal blocks kept idle

Having already de-allocated the linkages of 25 captive power plants for keeping their linkages idle,the Coal Ministry has identified its next target...

Written by Priyadarshi Siddhanta | New Delhi |
July 23, 2009 3:29:13 am

Having already de-allocated the linkages of 25 captive power plants for keeping their linkages idle,the Coal Ministry has identified its next target: companies that are doing nothing with their coal blocks. Nearly 15 firms may soon lose their blocks if the ministry carries out the plan.

“After due perusal of the status of the coal blocks allocated for captive power plants,we found that nearly 15 firms have been sitting idle on their blocks. We plan to de-allocate them soon,” Minister of State for Coal (independent charge) Sriprakash Jaiswal told The Indian Express. He said while seeking the blocks,the firms had pledged to ensure their due utilisation within a stipulated time frame,but even after substantial time has lapsed it emerged that they were either not serious about developing them or were incapable of doing so.

Earlier this month,Jaiswal had announced the cancellation of linkages of 25 captive power plants after the ministry’s behemoth Coal India Limited said despite the time lapse a large number of firms had not set up plants. “After due consideration,my ministry has decided to cancel the linkages of 25 CPPs,aggregating 1,292 MW and involving a coal requirement of 5.84 million tonnes per annum,” he said. Arguing that very few coal blocks allocated so far had started showing the desired results,Jaiswal pointed out,“What is of concern is that we allocated blocks to power companies,but very few blocks have shown the desired results — thereby negating the very purpose of allocating them. The enthusiasm in securing these coal blocks will have to be supplemented with their due utilisation.”

Of the 138 blocks hitherto allocated,just over a dozen have reached the desired production levels. The rest — some of which were allotted as far back as 1998 — have either not secured environmental clearances or have not submitted acceptable mining plans to the government.

On the plan to ensure enhanced coal production in the 11th Plan period to meet the increased demand from the thermal power sector,the minister said its behemoth was implementing 134 coal projects worth nearly Rs 26,000 crore. The projects are estimated to produce 309 million tonnes of coal. The navratna company expects 7.1 per cent growth in coal output with a total production of 435 million tonnes this fiscal. The new National Coal Wage Agreement VIII,which revised the salaries of close to 4,15,000 employees,heavily eroded CIL’s profit margin besides reportedly turning as many as 33 of its projects unviable.

On the issue of setting up a coal regulator for the sector,Jaiswal said the details were being worked out. Once it got through,his ministry would seek the approval of the union cabinet within the next six months and thereafter seek the Parliament’s nod on it.

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