Coal ministry to take back five blocks from NTPC

The country’s largest power producer, NTPC, will have to surrender five of its six captive coal blocks as it has failed to achieve the necessary milestones even after five years of allocation.

The mines will now be allocated to Coal India Ltd (CIL), which will supply coal to NTPC after the company sets up the end-use plant based on criteria fixed for supply of coal by the government.
A review committee led by the special secretary (coal) had found that NTPC had failed to meet the milestones required in the stipulated time period.

The five coal blocks that have been de-allocated Chatti Bariatu, Chatti Bariatu (South), Kerandari, Brahmani and Chichiro Patsimal.

NTPC has so far invested `52 crore in the Chatti Bariatu, `69 crore in Kerandari mines. No investment has been made in the other three mines.

DNA had first reported on March 8 that a committee under the chairmanship of special secretary (coal) had recommended de-allocation of five of the six coal mines allocated to NTPC.
The committee had recommended de-allocation of mines allocated to other companies as well.

NTPC had firmed up plans to invest about `10,000 crore to produce 50 mt of coal annually by 2013. The cost of producing coal from these mines would have been only one-fifth of what it pays to CIL.

Coal is critical for NTPC as more than 80% of its installed capacity of about 34,000 mw is coal-based.

Besides the NTPC mines, the ministry has also decided to de-allocate blocks awarded to Damodar Valley Corporation, Andhra Pradesh Power Generation Corporation, Tenughat Vidyut Nigam and the Electricity Boards of Bihar and Jharkhand, among others, for non-adherence to norms.

The private firms to which deallocation notices were issued include V S Lignite and Baidyanath Ayurved Bhawan.

In 2010, the ministry of coal had issued show-cause notice to private and government sector companies, after it found that the companies had not developed the allocated coal blocks even after the expiry of deadlines.

The coal ministry’s guidelines require an opencast mine to become operational within 36 months after its award. For underground mines, the time limit is 48 months. An additional six months is allowed if a block lies in forest area.

In 93 show-cause notices issued by the ministry of coal, 45 notices were meant for the government sector companies, while 48 notices were meant for private companies.

In two review meetings held on January 28 and February 4, the ministry of coal has decided that “if the government company allocatees have not achieved the milestones after expiry of the time line for production of coal from the blocks, these blocks may be considered for de-allocation with conditions that the blocks will be developed by the Coal India Ltd and their subsidiaries.”