Coal scam: Four mines can be de-allocated, says IMG

The Inter-Ministerial Group (IMG) on coal blocks allocation has recommended de-allocation of four mines alloted to private firms and encashment of bank guarantee of three others on the ground of non-development of mines within a prescribed time.

"The IMG, which reviewed eight cases yesterday has recommended de-allocation of four coal blocks including two alloted to private firm Field Mining and Ispat," a Coal Ministry official, who did not wish to be named, told PTI.

Field Mining and Ispat was slapped a show cause along with 58 others for delay in development of Chinora and Warora Southern Part coal blocks in Maharashtra.

This is the first recommendation by the IMG ever since controversy broke out over the allocation of coal blocks after the recent CAG report that criticised the government for allotting them in a non-transparency

The IMG had scrutinised eight cases yesterday in a marathon six-hour meeting out of a total 29 reviewed by it last week in the context of why production had not started within the prescribed timeline.

It had heard representatives of 29 coal block allottees on September 6, 7 and 8 out of of 58 allocations under focus.

Meanwhile, Coal Minister Sriprakash Jaiswal told reporters that he was hopeful that the IMG would submit its first report by September 17, two days after the September 15 deadline set earlier.

"I am hopeful that IMG will submit its report by September 17," Jaiswal said.

Meanwhile sources said that the IMG has recommended de-allocation of blocks mainly because the companies failed to set up end-use plants.

"None of the three companies, whose blocks have been recommended for de-allocation, have set up any end-use plants," the official said.

The other two blocks, recommended for de-allocation were given to Castron Mining and Domco Smokeless Fuel in 1999 and 2005, sources said. While Castron Mining was alloted Bramhadih block Domco was given Lalgarh North block in Jharkhand.

Sources said the bank guarantee of Virangana Steel for its three blocks-Marki Mangli II, III, IV to the tune of Rs two crore would be deducted.

"These blocks have come into production but they have certain slippages in achieving milestones due to which the IMG recommended the deduction of bank guarantee," sources said.

One case in which the IMG has recommended deposit of bank guarantee pertains to Monnet Monnet Ispat and Energy which was given Utkal B block.

"It has recommended submitting of bank guarantee for its block which was alloted in 1999. The block has progressed well on end use plant but they have slipped certain milestones," the official said.

He added that the IMG has recommended that in case Monnet Ispat and Energy fails to start production by by March 2013, their bank guarantee of Rs 90 crore would be forfeited and the block would be de-allocated.

The Group will have two more meetings to complete the task of scrutinising all the 29 allotments, the sources said.

Sources added that the IMG will take up 10 more cases for scrutiny in its meeting tomorrow.

The IMG will submit its recommendations to the Coal Ministry for a final call on it.