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New Delhi, Sept. 13: The government today decided to take back four coal blocks with private operators as penalty for not developing them in time.
Three companies now stand to lose the four blocks — Castron Mining forfeits the Brahmadiha block in Jharkhand; Fieldmining & Ispat Limited, the Chinora and Warora (West) Southern part blocks in Maharashtra; and Domco Smokeless Fuel Pvt Limited, the Lalgarh (North) block in Jharkhand.
The government also decided to take over the bank guarantees for three coal blocks held by Veerangana Steels Limited, now known as Topworth Urja, in Maharashtra as the firm has not followed timelines in developing the blocks.
Monnet Ispat was also asked to pay up a bank guarantee of Rs 90 crore, equal to three years of royalty, for its Utkal B block in Odisha.
Only one of the blocks de-allocated, Lalgarh held by Domco, was among those which had been the subject of an adverse report prepared by the CAG.
The blocks were cancelled not because there was irregularity in allocation but because the firms failed to meet commitments to end users.
“None of the three companies, whose blocks have been recommended for de-allocation, have set up any end-use plants,” an official said.
The cancellation and takeover of guarantees came after a review of 29 blocks.
The government will eventually look at all allocations made since 1993 and not just the ones under the CAG scanner. More meetings are expected to be held tomorrow and on Monday and later this month.
On Monnet Ispat, the official said, “The inter-ministerial group (IMG) on coal blocks allocation has recommended submitting of bank guarantee for its block which was allotted in 1999. The block has progressed well on end use plant but they have slipped on certain milestones.”
The IMG has recommended that in case Monnet Ispat failed to start production by March 2013, their bank guarantee would be forfeited and the block would be de-allocated, he added.
Calcutta-based Castron Mining, which had changed its name from Castron Tech in 2003 four years after getting the mining lease, received a belated showcause notice in 2011 for doing nothing with their open cast mining lease which was supposed to feed an iron and steel project. The notice had warned Castron of a cancellation a year ago.
“These blocks have come into production but they have certain slippages in achieving milestones because of which the IMG recommended the deduction of bank guarantee,” sources said.
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