Millennium Post

Coal controller must re-calculate bank guarantee, says IMG

An inter-ministerial panel has asked the Coal Controller to re-calculate the bank guarantee to be deducted in the case of those prior mine allottees that have delayed production of blocks and have filed court cases against the show-cause notices issued to them.

“There were 55 court cases filed by various prior allocatees in the matter. It was considered expedient to take up these cases first, to resolve the issue of BG (Bank Guarantee),” said the minutes of the inter-ministerial group (IMG) meeting held recently to review the issue of bank guarantee. “Accordingly, CCO (Coal Controller Organisation) was directed to revisit the comments of state governments/CMPDIL and re-calculate the BG amount to be deducted after computing the slippages against each milestone for these cases where court cases had been filed,” it said.

Thereafter, the remaining cases would be taken up, it said. The panel was looking into the issue of bank guarantees of the previous allottees pertaining to 127 coal blocks. It further said that in those cases where the prior allocatee did not submit application in time due to which there had been slippage of a particular milestone, the related subsequent milestones not achieved would logically be considered as a slippage on part of the prior allocatee. CCO would redo the computation of BG deduction on this principle uniformly, it said. The IMG further said 31 cases -- where either there was no condition of BG in the allocation letter or BG matter was reviewed earlier by the government -- could be dropped from the total cases of 127 coal blocks that were issued show-cause notices.

The 31 cases relate to companies like Jindal Steel and Power Ltd (JSPL), NTPC and Nalco. The government had in January issued fresh show-cause notices to prior allottees of coal blocks, including JSPL, JSW and Tata Steel, seeking reasons for delay in mine development and warned of deducting their bank guarantees if they failed to furnish replies. “You are hereby called upon to show cause to why the delay in the development of the coal blocks should not be held as violation of the terms and conditions of the allocation letter,” the Coal Ministry had written to the prior allottees of 127 coal blocks. 

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