New Delhi (09.04.2022): The CCEA chaired by Prime Minister Narendra Modi has approved the Coal Ministry’s proposal for providing a one-time window to Central and state PSUs to surrender non-operational coal mines without penalty (forfeiture of bank guarantee) and without citing any reason. “This may release several coal mines which the present PSU allottees are not in a position to develop or are disinterested and could be auctioned as per the present auction policy. Three months’ time will be granted to the allottee Government Companies to surrender the coal mines from the date of publication of the approved surrender policy,” said the government.
Post cancellation of coal block allocation by the Supreme Court in 2014, to prevent immediate disruption of coal supplies to thermal power plants, the government had allotted many canceled coal blocks to state and Central PSUs on the allotment route. The allocation route was expeditious and it was expected that the coal requirement of state GENCOs would be met from those blocks. The revenue share payable by state/Central PSUs is fixed on per tonne basis, unlike the private sector which has to bid. Given the context of allocation of coal blocks at that point of time, conditions for timelines for operationaliSation of coal blocks were very stringent and firm, leaving no wiggle room either to the successful allottee or the Nominated Authority. Penalization for delay in operationalization of coal mines has resulted in disputes and court cases.
Till December 2021, 45 mines out of 73 coal mines allotted to state and Central PSUs remained non-operational, with the due date of commencement of mining operations already over in the case of 19 coal mines. Delays were due to reasons beyond the control of allottees, for example, law and order issues, enhancement in the area of forest from what was declared earlier, resistance of land-holders against land acquisition, and geological surprises in terms of availability of coal resources.
CCEA clears PSUs to surrender non-operational coal mines
By IndianMandarins - 2022-04-09 12:28:00
New Delhi (09.04.2022): The CCEA chaired by Prime Minister Narendra Modi has approved the Coal Ministry’s proposal for providing a one-time window to Central and state PSUs to surrender non-operational coal mines without penalty (forfeiture of bank guarantee) and without citing any reason. “This may release several coal mines which the present PSU allottees are not in a position to develop or are disinterested and could be auctioned as per the present auction policy. Three months’ time will be granted to the allottee Government Companies to surrender the coal mines from the date of publication of the approved surrender policy,” said the government.
Post cancellation of coal block allocation by the Supreme Court in 2014, to prevent immediate disruption of coal supplies to thermal power plants, the government had allotted many canceled coal blocks to state and Central PSUs on the allotment route. The allocation route was expeditious and it was expected that the coal requirement of state GENCOs would be met from those blocks. The revenue share payable by state/Central PSUs is fixed on per tonne basis, unlike the private sector which has to bid. Given the context of allocation of coal blocks at that point of time, conditions for timelines for operationaliSation of coal blocks were very stringent and firm, leaving no wiggle room either to the successful allottee or the Nominated Authority. Penalization for delay in operationalization of coal mines has resulted in disputes and court cases.
Till December 2021, 45 mines out of 73 coal mines allotted to state and Central PSUs remained non-operational, with the due date of commencement of mining operations already over in the case of 19 coal mines. Delays were due to reasons beyond the control of allottees, for example, law and order issues, enhancement in the area of forest from what was declared earlier, resistance of land-holders against land acquisition, and geological surprises in terms of availability of coal resources.
