NTPC may soon have to surrender five of its six captive coal blocks - Company failed to achieve necessary milestones

NTPC, the largest power producing company of the country, may soon have to surrender five of its six captive coal blocks, since the company has failed to achieve the necessary milestones even after five years of allocation.

The committee, under the joint secretary (coal), has recommended revoking the mines after studying the replies sent by the companies to the show cause notices issued to them last year for delays.

If these recommendations are accepted, the mines may be allocated to Coal India Ltd (CIL), which will supply coal to NTPC after the company sets up the end-use plant based on the criteria fixed for supply of coal by the government.

The five coal blocks that are likely to be deallocated are Kerandari (228 million tonne), Chatti Bariatu (243 mt), Dulanga (260 mt), Talaipalli (965 mt), Brahmini and Chichro Patsimal.

For the Pakri Barwadih coal block, the coal ministry has decided to give a warning to the company.

However, the company denies any delay. “There has been no delay in development of coal blocks. As per the analysis by International Consultants, the benchmark for development of coal block internationally is upto 7 years, whereas the same takes upto 17 years in India. The progress at NTPC blocks is much ahead of other contemporary coal block allocated and is integral to the company’s fuel strategies,” said a company spokesperson.

While NTPC has made an investment of Rs52 crore in its Chatti Bariatu block, Rs69 crore have been invested in Kerandari block.

The company has spent Rs32 crore for developing Talaipalli and Rs16 crore have been invested in Dulanga coal block.

NTPC had firmed up plans to invest about Rs10,000 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.

In two review meetings held on January 28 and February 4, the coal ministry had said, “If the allocatee companies have not achieved the milestones after expiry of the timeline for production of coal from the blocks, these blocks may be considered for deallocation with conditions that the blocks will be developed by Coal India and its subsidiaries.”