Government threatens to cancel coal block allocations of four companies including NTPC and of Coal India itself

The Union government has threatened to cancel the coal block allocations of four companies, including the country's largest power generator, NTPC, and of Coal India Ltd itself, the largest mining firm.The ministry's showcause notices to these comapnies has asked for explanations for failure to develop blocks allotted years before, despite repeated reminders.The ministry has served similar notices to Jharkhand State Mineral Development Corporation for delays in development of the Patratu and Robodih OCP coal blocks and Mumbai-based Binani Cement Ltd for the Nimbri Chandavadan lignite block in Rajasthan.

The ministry has prepared a list of 93 captive coal blocks where development has not been satisfactory and is in the process of threatening the block holders with de-allocation by slapping showcause notices. Since September 22, the ministry has issued similar notices to 50 companies.

NTPC and Coal India have received flak for delays in development of two blocks, Brahmini and Chichro Patsimal in Orissa, jointly allotted to them in 2006. The two blocks, with geological reserves of two billion tonnes, were to be developed by a 50:50 joint venture between the two companies. Coal from the blocks was to be used for the Kahalgaon and Farakka expansion projects of NTPC.

By the original plan, the blocks were to see production from October 2011. A review meeting in June 2009 found all milestones still pending. Another review this July showed the JV company had not been formed. "It is seen that the company has not made any progress at all and thus it appears that the company is non-serious about timely development of the block," the showcause notice to both states.

It asks for an explanation within a month and asks why the delay should not be termed a breach of the terms of allotment.NTPC was allotted eight coal blocks with total reserves of around five billion tonnes in the past six years. All were expected to come into production between April 2008 and March 2012. Yet, not a single block has commenced production, even while the power generator had set for itself a target of coal production from captive mines to 47 million tonnes per annum by 2017.