logo

SC’s coal block cancellations may hit PSBs by Rs 96,484 crore: Govt

SC’s coal block cancellations may hit PSBs by Rs 96,484 crore: Govt
The Supreme Court had in September cancelled allocation of 204 coal mines since 1993 to power plants and other user industries after finding their allotment irregular.

Banks have extended credit to power plants built based on coal supply from some of the mines cancelled by the apex court.

‘The impact of cancellation of coal block allotment on public sector banks due to likely stoppage of production of power plants is estimated at Rs 96,484 crore,’ Sinha said in a written reply to a question in the Rajya Sabha.

He, however, did not say if all the Rs 96,484 crore loan by banks to the projects may turn into bad debt if mining is stopped.

The Supreme Court had allowed companies to continue mining till 31 March in blocks where coal production had already started.

‘As per the information collected from public sector banks, the exposure of all PSBs to the power
sector is Rs 5,82,469 crore,’ Sinha said.

The government had last month promulgated an Ordinance for auctioning the 204 coal blocks whose allocation was cancelled by the Supreme Court. In that Ordinance, a provision was added for allowing commercial mining of coal by private companies. The first lot of 74 mines will be auctioned to specific end-users in in early February.

Meanwhile, the government is in the process of formulating strategies to almost double Coal India’s output to one billion tonnes over the next five years.

‘We are looking at one billion tonne by 2019. Do you think that Coal India on its own will do...everybody is working towards this objective of one billion tonne,’ Coal Secretary Anil Swarup said.

The Coal Ministry has sought suggestions from stakeholders, industry bodies like Ficci and others, he added. ‘And I can guarantee that in coal sector through public private partnership (PPP) we will move....public private partnership of ideas for moving ahead,’ he said at ISB National Conclave.

Power and Coal Minister Piyush Goyal had earlier said the target of doubling domestic production from the current 490 million tonnes level was ‘possible’. He had said the country should make efforts
to become an exporter of coal by drawing up a clear roadmap to achieve this. The state-run firm
will invest Rs 5,000 crore to buy 250 rakes for transporting coal.

Coal India, which accounts for 80 per cent of domestic coal production, missed its output target of 482 million tonnes for 2013-14, producing 462 million tonnes during the period.

Production fell short of target because of various reasons, including lack of environment clearance to coal mining projects.

In 2012-13, the company produced 452.5 million tonnes of coal, falling short of the 464 MT target. Coal India’s production target for 2014-15 has been set at 507 MT.
PTI

PTI

Our contributor helps bringing the latest updates to you


Share it
Top