NEW DELHI: In a move which could help private infrastructure companies such as ArcelorMittal, Jindal Power, Essar Power, NTPC, Lanco, GMR and Jaiprakash Industries get faster possession of coal blocks, the government proposes to revamp the archaic Coal Block Allocation (Acquisition and Development) Act of 1957. The Act established greater public control and rights over the coal mining industry and its development and provided for government acquisition of unworked land containing coal deposits.
With block allocatees facing hurdles in transfer of land from the subsidiaries of Coal India (CIL) under the CBA Act, the government has come around to the view that CIL arms should urgently transfer land rights to coal block allocatees. Necessary guidelines will be issued, if necessary.
“Transfer of surface right and mineral right of land acquired by CIL subsidiaries to block allocatees is sometimes a major cause of delay,” read the minutes of a high-powered meet headed by additional secretary, ministry of coal. Following discussions, sources said, the ministry is in the process of amending the CBA Act and will come up with revised guidelines regarding allocation of coal blocks under the Act. The ministry will also give top priority in quick settlement of bipartite agreements between subsidiary coal companies and coal block allocatees (power and mining companies) without delay.
The government also feels allocatees may claim any delay in allotting coal blocks as grace period and use it to escape penalty in the form of forfeiture of bank guarantee provided by captive coal block holders or complete de-allocation of such blocks.
The CBA Act is of concern to many captive block allocatees in power, steel and cement since many blocks offered by the coal ministry were carved out of blocks earlier reserved for CIL and its subsidiaries. Besides forest and environmental clearances, land transfer rights for such blocks is a major reason for delay in bringing these blocks under production quickly to resolve the coal shortage in the country.
Since 1993, 216 coal blocks ave been allocated to eligible public and private companies under the Coal Mines (Nationalisation) Act, 1973. However, so far, only about 28 such blocks have started production and are mining just over 30 million tonnes of coal against the potential of over 200 million tonnes. Many captive projects are delayed over land transfer issues.
The delay in bringing coal blocks under production by private companies has also invited opposition attack on the government as allegations are being leveled that blocks have been given without giving due consideration to the urgency of requirement. Even CAG in a leaked draft report on allocation of captive coal blocks between 2004-09 has put the exchequer’s loss to the tune of Rs 10.7 lakh crore over its faulty captive block policy.