Govt gives one-time window to PSUs to surrender non-operational coal mines

The Cabinet Committee on Economic Affairs (CCEA) on Friday approved the Coal Ministry’s proposal for providing a one-time window to the Central and State PSUs to surrender non-operational mines without penalty (forfeiture of bank guarantee) and citing without any reason.

“This may release several coal mines of PSU allottees who are not in a position to develop or are disinterested and could be auctioned as per the present policy. A 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,” Ministry said in a statement.

Post cancellation of coal blocks by the Supreme Court in 2014, to prevent immediate disruption of coal supplies to thermal power plants, the government allotted many cancelled coal blocks to the state and central PSUs. 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 the state/central PSUs is fixed on per tonne basis unlike private sector who have to bid. Given the context of allocation of coal blocks at that point of time, conditions for times lines for operationalisation of coal blocks were very stringent and firm leaving no wriggle room either to the successful allottee or the Nominated Authority. Penalisation for delay in operationalisation has resulted in disputes and court cases, the ministry explained.

Till December 2021, 45 mines out of 73 allotted to government companies remained non-operational and due date of commencement of operations in case of 19 coal mines has already over.

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 acquisition; geological surprises in terms of availability of coal resources.

Coal sector is a key to energy security for the country. In the approval, good quality coal blocks which were allotted earlier can be quickly recycled back after removing technical difficulties and adjusting boundaries and offered to interested parties under the recently launched commercial coal mines auction policy.

Early operationalisation of coal blocks will provide employment, boost investment, contribute to economic development of backward areas, reduce litigation and promote ease of doing business leading to reduction in import of coal in the country.

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