‘Captive’ coal block owners face government ire

Even as state-owned Coal India Ltd, the world's largest producer of the dry fuel, prepares for its expectedly successful initial public offering, the government seems to be rethinking its policy of awarding 'captive' coal licences.

Tata Steel, Jindal Steel and Power (JSPL), GVK Power, Essar Power, MMTC Ltd and NTPC Ltd are among those who have been asked why their licences should not be cancelled, as they have not developed their allotted fields.

''The coal ministry has decided to issue 'show cause' notices to various companies for not making sincere efforts for the development of these blocks in the past several years,'' a statement issued by the ministry said.

The decision to issue show cause notices to the companies that have been issued several reminders in the past was taken at a high-level meeting in the ministry today.

Of the 93 coal blocks where development has not been satisfactory, 45 belong to public sector companies and the rest to the private sector. All the four lignite blocks belong to private players.

The power, steel and cement industries are heavily dependent on coal for their fuel needs. The current overall production of the critical fuel, at 550 million tonnes annually, falls way short of the demand, which is increasing at an annual rate between 10 and 30 per cent across different sectors in the country. While the government has allocated more than 207 coal blocks so far, production has started from only 26.