An inter-ministerial group has recommended for the second time that the government take back the two largest coal blocks India has ever allotted to private-sector companies because they have not made much progress on them in the five years since they were assigned, a senior coal ministry official told Scroll.in on Tuesday.
After its meeting on the weekend, the group said that the government should "de-allocate" the North of Arkhapal Srirampur coal block that it had allotted to Strategic Energy Technology Systems, a joint venture between the Tata group and South-African firm Sasol, and the Ramchandi Promotional block that it had allotted to Jindal Steel and Power. De-allocation entails the companies returning the blocks to the government, which had allocated them in February 2009.
"The meeting took place on Saturday," said Vivek Bhardwaj, joint secretary at the ministry of coal, when asked whether the government had issued letters to the companies informing them that they would have to return the blocks. "What is it today? Tuesday. Even a newspaper takes time to publish." The group's recommendation would be forwarded to the coal minister, he added.
Located in the state of Odisha and carrying 1.5 billion tonnes of coal reserves each, the two blocks are the only ones that the government has allotted in which the coal is to be converted to liquid fuels using coal-to-liquid technology, which is new to India.
To start mining operations in a block, a company first needs a prospecting licence so that it can prepare a geological report. Following this, it needs to obtain a mining licence as well as forest and environmental clearances. These together constitute five milestones.
The inter-ministerial group, which reviews the work done by companies on their coal blocks, had first made the recommendation at a meeting in October 2013, its 23rd meeting, when it said that the government should de-allocate the two blocks because the companies had not made much progress, said Bhardwaj.
He said that the ministry of coal did not proceed on the de-allocation suggested by the inter-ministerial group in October because the ministry had not received a response from the Odisha government about the status of the two coal blocks.
"Notices for the 23rd meeting of the IMG were sent out," he said. "But the Odisha government was not able to respond in time. Since other states had responded, the ministry went ahead with the meeting. But the de-allocation was deferred since it was felt that Odisha government's response was needed. On Saturday, the 24th meeting of the group took place. The group reiterated the de-allocation recommendation it made in the 23rd meeting."
In November, the Odisha government informed the ministry that it had not granted the two companies prospecting licences, Bhardwaj said. Both companies also confirmed to Scroll.in that they had not received prospecting licences from the Odisha government.
"Though the block was allocated in February 2009, the prospecting licence order was issued by the government of Odisha only on March 15, 2012," said a spokesperson for the Tata joint venture. "However, the government of Odisha is yet to issue the PL deed. We await the PL deed."
A spokesperson of Jindal Steel and Power said, "The prospecting licence is expected to be issued by government of Odisha shortly."
The companies also told Scroll.in that they were yet to receive any communication from the ministry of coal about the de-allocation.
In August 2012 after controversy erupted over a report published by the Comptroller and Auditor General, the government set up the inter-ministerial group to review the progress of all coal blocks. The CAG report had said that the government had allocated several coal blocks without competitive bidding and had caused a loss of Rs 1.86 lakh crore to the exchequer.
After the CAG report became public, several public interest petitions were filed in the Supreme Court asking that it direct the government to cancel the allocations on the ground that they were arbitrary and illegal. The petitioners said that the government should take the coal blocks black and auction them.
In January, the Supreme Court asked the government to take back at least those coal blocks where mining has not begun. Of the 218 coal blocks the government has allocated since 1993, production had begun on only 35 coal blocks by May 2013, according to a press statement of the ministry of coal.
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After its meeting on the weekend, the group said that the government should "de-allocate" the North of Arkhapal Srirampur coal block that it had allotted to Strategic Energy Technology Systems, a joint venture between the Tata group and South-African firm Sasol, and the Ramchandi Promotional block that it had allotted to Jindal Steel and Power. De-allocation entails the companies returning the blocks to the government, which had allocated them in February 2009.
"The meeting took place on Saturday," said Vivek Bhardwaj, joint secretary at the ministry of coal, when asked whether the government had issued letters to the companies informing them that they would have to return the blocks. "What is it today? Tuesday. Even a newspaper takes time to publish." The group's recommendation would be forwarded to the coal minister, he added.
Located in the state of Odisha and carrying 1.5 billion tonnes of coal reserves each, the two blocks are the only ones that the government has allotted in which the coal is to be converted to liquid fuels using coal-to-liquid technology, which is new to India.
To start mining operations in a block, a company first needs a prospecting licence so that it can prepare a geological report. Following this, it needs to obtain a mining licence as well as forest and environmental clearances. These together constitute five milestones.
The inter-ministerial group, which reviews the work done by companies on their coal blocks, had first made the recommendation at a meeting in October 2013, its 23rd meeting, when it said that the government should de-allocate the two blocks because the companies had not made much progress, said Bhardwaj.
He said that the ministry of coal did not proceed on the de-allocation suggested by the inter-ministerial group in October because the ministry had not received a response from the Odisha government about the status of the two coal blocks.
"Notices for the 23rd meeting of the IMG were sent out," he said. "But the Odisha government was not able to respond in time. Since other states had responded, the ministry went ahead with the meeting. But the de-allocation was deferred since it was felt that Odisha government's response was needed. On Saturday, the 24th meeting of the group took place. The group reiterated the de-allocation recommendation it made in the 23rd meeting."
In November, the Odisha government informed the ministry that it had not granted the two companies prospecting licences, Bhardwaj said. Both companies also confirmed to Scroll.in that they had not received prospecting licences from the Odisha government.
"Though the block was allocated in February 2009, the prospecting licence order was issued by the government of Odisha only on March 15, 2012," said a spokesperson for the Tata joint venture. "However, the government of Odisha is yet to issue the PL deed. We await the PL deed."
A spokesperson of Jindal Steel and Power said, "The prospecting licence is expected to be issued by government of Odisha shortly."
The companies also told Scroll.in that they were yet to receive any communication from the ministry of coal about the de-allocation.
In August 2012 after controversy erupted over a report published by the Comptroller and Auditor General, the government set up the inter-ministerial group to review the progress of all coal blocks. The CAG report had said that the government had allocated several coal blocks without competitive bidding and had caused a loss of Rs 1.86 lakh crore to the exchequer.
After the CAG report became public, several public interest petitions were filed in the Supreme Court asking that it direct the government to cancel the allocations on the ground that they were arbitrary and illegal. The petitioners said that the government should take the coal blocks black and auction them.
In January, the Supreme Court asked the government to take back at least those coal blocks where mining has not begun. Of the 218 coal blocks the government has allocated since 1993, production had begun on only 35 coal blocks by May 2013, according to a press statement of the ministry of coal.
