Panel gives 58 coal mines chance to explain delays

The 58 companies whose mines have been hit by delays after being allotted coal blocks by the government should be given a final chance to explain the reasons for the delays before a decision on cancelling the allotments can be taken, the high-level Inter-Ministerial Group (IMG) decided on Monday.

Accordingly, the group will hear the firms for three days beginning Friday, a senior coal ministry official said. The decision came at the fourth meeting of the IMG which saw the panel studying the replies of these firms to the showcause notices sent, asking them to explain the slippages in their mines.

The IMG will also take into account the latest progress report of the Coal Controller, who is understood to have identified excessive delays by some firms in developing their blocks, before recommending action against the firms, sources said.

With the government under criticism for failing to encash the bank guarantees submitted by these firms, Monday's meeting also discussed the modalities for encashing the bank guarantees and punishing the defaulting firms. "The guidelines in this connection have been firmed up and there was a general agreement in the meeting that the allottees need to be informed that they must develop their blocks unless there are pressing reasons that are beyond their control," one source said.

An expert panel had suggested way back in 2005 that 50 per cent of the bank guarantee should be linked to assured output from the mines and the rest to the setting up of end-use plants. However, this was modified by the coal ministry in 2007 to link 50 per cent of the guarantee to milestones that have to be achieved before production begins and the rest to guaranteed output.

Sources said that there had been instances when the coal ministry was left fuming when it discovered that some firms which had been allotted coal blocks were yet to submit bank guarantees.

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