Centre cancels Bhatgaon Coal Block of Chhattisgarh

     New Delhi/Raipur, December 01, 2012: Government of India has cancelled the controversial Bhatgaon coal blocks allotted to Chhattisgarh government for misrepresentation of fact by the state Government and also for lack of progress in its development.

     In view of the “unsatisfactory progress” in development of coal mine and taking into account all factors, including “misrepresentation” of facts “Shankarpur (Bhatgaon-II) and Extension coal block allocated to M/S Chhattisgarh Mineral Development Corporation Limited is de-allocated,” a Coal Ministry order said here at New Delhi.

     The Central Government also forfeited 50 per cent of the bank guarantee of the Company and said “The Company shall not be eligible for allocation of coal block in lieu of the de-allocated coal blocks.”

      Bhatgaon Coal block in Sarguja district was being developed by Chhattisgarh Government with the help of BJP MP Ajay Sancheti related company and the Comptroller and Auditor General had also raised objections in several counts against that move.

     “After detailed deliberations, the IMG (Inter ministerial group) made its recommendation to de-allocate Shankarpur (Bhatgaon-II) and an Extension coal block which was allocated to M/S Chhattisgarh Mineral Development Corporation Ltd in its 15^th meeting held on November 05, 2012,” the Coal Ministry order of November 30, 2012 said.

     After allegation of irregularities in allocation of Coal blocks by the Centre, the Government of India had set up an Inter-Ministerial Group (IMG) on June 21, 2012 under the chairmanship of Additional Secretary Coal. The IMG has been given mandate to review the progress of development of allocated coal blocks and associated end use projects and to recommend action, including de-allocation, if required.

     The IMG observed, during the review meeting it was noticed that no serious efforts had been made by the Chhattisgarh Mineral Development Corporation to develop the coal block, even after repeated assurances tendered by the Company during the period.

     It was also noticed that all the important/critical milestones such as grant of Forest clearance, EMP, Mining lease are pending, it stated.

           The IMG noted that the allotment was made on July 25, 2007 and even after 5 years of allotment, the environment clearance and forest clearance are pending and no land had been possessed.

     There was discrepancy in the figure of investment as contained in the Chartered Account certificate and reported to the Coal Controller and it was wrongly reported to Coal Controller that land acquisition has been completed, the IMG noted.

     Giving details of the discrepancy in the investment figure, the Coal Ministry said, the investment made in the coal block as per CA certificate submitted by the Company was Rs 57.09 Crore, consisting of Rs 19.84 Crore deposited to Collector as service charge on January 27, 2011 for land acquisition, Bank Guarantee deposit, interest and other expense.

     However, in its report to the Coal Controller, the Company has shown an investment of Rs 120.59 Crore in the statement for the quarter ending June 2012.

     During presentation on October 09, 2012, the Company mentioned investment of Rs 57 crore only and argued that the entire delay was not attributable to them, according to the order of the Director of Coal Ministry PSS Reddy.

          “In view of the unsatisfactory progress in development of coal mine and taking into account all factors, including misrepresentation of facts, the IMG recommends that the coal block may be de-allocated and 50 per cent of the Bank guarantee related to development of the coal block may be forfeited,” the order said.

     “Accordingly, Shankarpur (Bhatgaon-II) and Extension coal block allocated to M/S Chhattisgarh Mineral Development Corporation Limited is de-allocated. The Company shall not be eligible for allocation of coal block in lieu of the de-allocated coal blocks,” Reddy in his letter to the state Government said.

     The Bank guarantee, as per recommendation of the IMG, of Rs 1.59 Crore that is 50 per cent of the Bank Guarantee related to the development of the coal block be forfeited and be deposited with the Government and the remaining bank guarantee may be returned, the order said.