Captive coal block holders may have to shell out a portion of bank guarantee for delays in developing the reserves, as the government plans to chalk out a policy framework for such deductions.
“In this regard, Ministry of Coal may consider framing policy guidelines regarding quantum of deduction over period of delay,” an official in the coal ministry said, quoting an internal document.
A government panel on captive coal blocks development recently observed delays in achieving milestones and recommended deductions from the bank guarantees, corresponding to the slippages as per the allocation conditions.
Joint venture firms have been advised by the panel to submit their bank guarantee in case of coal blocks allocated jointly, the source said, adding, “The individual submission of bank guarantees will not be accepted.”
Last year, while de-allocating some coal blocks, the committee had recommended the deduction of bank guarantees in case of 15 private firms for failing to commence production as per the allotment norms.
The Coal Ministry had cancelled the allotment of 14 coal blocks and one lignite block to six PSUs, including NTPC, and three private firms for failing to develop mines.
However, in January, the government gave back six coal blocks of the de-allocated mines to firms, including Damita Valley Corporation and NTPC.