Tata, JSPL, others get fresh notice on in coal block allocation

The government on Friday issued fresh show cause notices to prior allottees of coal blocks like Jindal Steel and Power (JSPL), JSW Energy and Tata Steel, asking reasons behind delays in mines development and warned of deduction in 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, including in detail the reasons for slippage in respect of each milestone and agency responsible for such delay, within a period of three weeks from the date of issue of this show cause," the Coal Ministry said to the prior allottees of around 130 coal blocks.

The ministry also issued fresh notices to companies like Monnet Ispat and Energy, Bhushan, Nalco, Hindalco Industries, NTPC, Essar Power, SAIL, Adani Power and Tata Power.

The ministry further said, if they failed to do so "it would be presumed that your company (ies) has (have) no explanation to offer and course of action regarding invocation/deduction of Bank Guarantee (BG) would be decided against your company (ies)".

The coal ministry said the inter-ministerial group (IMG) at its meeting held in December 2014 has observed that subsequent annulment of coal blocks cannot exempt the prior allottees of the cancelled coal blocks from invocation/deduction of BG.

"Subsequent development or consequence cannot override the condition precedent or bounden stipulations of allocations of coal blocks. As per the conditions of allocation letter, allocatees were bound to develop the coal blocks within the time period," it added.

The issue of BG remains alive, the ministry said adding that the IMG also felt that it was a fact that apart from delays and lapses on the part of the prior allottees, the same might have also been caused due to delay both on the part of agencies of Centre as well as the State governments.

"Accordingly, the IMG has recommended to issue show cause notice (SCN) afresh to coal block allocatees as to why the BG submitted with the government should not be deducted for delay in development of coal block until the block was held by the companies and for not adhering to the milestones chart prescribed for block development," the notice said.

The recommendations of the IMG have been accepted by the government, the coal ministry said.