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Govt slaps bank guarantee on JSPL for delaying mine development

The government has decided to impose bank guarantee on Jindal Steel and Power Ltd (JSPL) for delaying the development of Utkal B-1 coal block in Odisha, Parliament was informed on Monday.

'IMG (Inter-Ministerial Group) recommended the imposition of bank guarantee on JSPL, the allocatee of Utkal B-1 coal block to ensure adherence to the milestones for development.

The recommendations of the IMG have since been accepted by the government,' Coal Minister Sriprakash Jaiswal said in a written reply to Rajya Sabha.

The production from the coal block, the minister said, has not yet started and the responsibility of developing the mine as per the prescribed guidelines and milestone chart attached with the allocation letter rests with the allocatee company.

Jaiswal further said that IMG in its meeting held in October reviewed the progress of development of this block wherein the block allocatee was given an opportunity to present their case.

Utkal B-1 coal block, alloted to Talcher Mining Pvt in 1996 for power generation, was deallocated in 2003 as there was no progress in arbitration case between TMPL and Tamil Nadu Electricity board with regard to power purchase agreement and opening of escrow account.

The mine was thereafter alloted to JSPL in 2003 based on recommendation of Screening Committee to meet the company's requirement for their proposed power plant and iron and ferro alloys plants to be set up in Odisha.
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