Government to cancel four coal blocks to private firms

September 13th, 2012 - 8:04 pm ICT by IANS  

New Delhi, Sep 13 (IANS) The inter-ministerial group (IMG) on coal block allocations Thursday recommended de-allocation of four coal blocks allotted to private companies since they have failed to set up end-use plants.

The IMG also recommended encashment of bank guarantee of three others for failing to develop their mines within the prescribed time frame.

The recommendations have been accepted by the government, according to an official release.

The four blocks are Bramhadih Block allocated to Castron Mining, Chinora and Warora (Southern Part) Blocks allocated to Fieldmining and Ispat Ltd and the Lalgarh (North) Block allotted to DOMCO Smokeless Fuels.

In the case of Utkal B2 Block allocated to Monnet Ispat, the IMG asked the company to submit bank guarantee amounting to three years royalty failing which the block will be deallocated.

In case of Marki Mangli-II, III and IV Blocks allocated to Shri Virangana Steels, the IMG recommended de-allocation and deduction of bank guarantee.

This is the first recommendation by the IMG ever since controversy broke out over the allocation of coal blocks after the country’s official auditor in a recent report said the government had lost up to Rs.186,000 crore ($33.67 billion) by not auctioning the coal blocks.

The IMG last week met with representatives of 29 firms, which presented their cases. The committee Wednesday scrutinised cases of eight firms. It is scheduled to review the rest 23 firms in its next meeting Friday.

The IMG, composed of bureaucrats from different ministries, is examining the cases of 58 companies, public and private, who have failed to meet deadlines for different stages of development of mines.

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