JOIN USCentre to deallocate another coal block
Two days after an Inter-Ministerial Group (IMG) recommendation, the Centre has agreed to deallocate Gourangdih ABC mine jointly allocated to JSW Steel and Himachal EMTA and deduct bank guarantees of the two companies for violating conditions of developing the block in time.
So far, the Coal Ministry has recommended deallocation of five out of eight blocks recommended by the IMG.
“I have approved the IMG’s recommendations given on Friday and will take a call on others,” Coal Minister Sriprakash Jaiswal told a news agency ahead of the meeting of the committee, scheduled on Monday afternoon.
Sources said the Ministry has also decided to “deduct bank guarantees” of the two companies that got blocks.
The IMG is also said to be taking a decision on the fate of 29 coal blocks allotted to private companies in batches. After the CAG said that Rs 1.86 crore was lost notionally owing to the UPA government’s reluctance to opt for competitive bidding in coal block allocation, the IMG had issued show cause notice to 58 private companies.
JSW Steel and Himachal EMTA had got the block, which contains 61.54 million tonnes (MT) of extractable coal reserves, in 2009. The coal was meant for a power project. The audit report had alleged that the companies owning the block might have got windfall gain of Rs 1,818 crore.
Meanwhile, Finance Minister P Chidambaram on Monday differed with the CAG’s suggestion of opportunity costing. He said government is not in the business of trading commodities but facilitates allocation of resources for generation of power and production of steel and cement for common good.
When asked about CAG’s method of opportunity costing, which means that a commodity should be traded at the market price, he said if prices of coal were higher, the end-use products would have been costlier.