Mine given to Cong MP Naveen Jindal`s JSPL faces de-allocation

Two coal blocks including one given to Congress MP Naveen Jindal`s JSPL face the prospect of de-allocation as their cases.

Updated: Sep 02, 2012, 12:29 PM IST

New Delhi: Two coal blocks including one given to Congress MP Naveen Jindal`s JSPL face the prospect of de-allocation as their cases would be under special focus at the meeting of inter-ministerial panel Monday.

The Coal Ministry has advised the IMG to do "due diligence" and record all specific reasons for recommending de-allocation including in these two specific cases, sources said.

The special focus on these blocks comes against the backdrop of displeasure expressed by the Prime Minister`s Office (PMO) over inaction by the Coal Ministry with regard to initiation of de-allocation of blocks which failed to start production.

The IMG, at its meeting in July, had recommended de-allocation of Jitpur block given to Jindal Steel and Power Limited (JSPL) and Lohari block given to Usha Martin for power plant and sponge iron plants respectively. Both the blocks are in Jharkhand.

Jitpur, allotted in 2007 has an estimated 81 million tonnes (MT) of coal. Lohari, given in 2005, has about 10 MT of dry-fuel reserves.

At a meeting of IMG on August 8, it was decided that inter-ministerial panel "could consider the representation (for not taking the extreme step of de-allocation of two blocks) on the basis of fresh information only if the same is referred to it by the government."

It was noted that the representative from Law and Justice Ministry had said that the "recommendations in respect of the companies have become `functus officio` and it is for the government to take action on the representation as well as recommendations."

Pushed by an upset PMO, coal ministry has got into action to expedite the process of de-allocating the blocks ahead of the IMG meeting scheduled for tomorrow to consider de-allocation many of the 58 blocks which have failed to begin production.

According to sources, the Coal Ministry decided to complete by September 15 the entire exercise in all cases where showcause notices were issued.

Notices were issued in April to 58 blocks, including 25 private firms like Tata Power, ArcelorMittal, Reliance Power, Hindalco, Grasim Industries, GVK Power.

According to Coal Ministry officials a good number of these 58 blocks are among those mentioned in the CAG report.

The government auditor CAG in its recent report stated that undue benefits to the tune of Rs 1.86 lakh crore were extended to private firms on account of allocation of 57 mines to them.

The CBI is also probing criminality in 12 firms which were given licenses under the `fast track` category but did not commenced mining.