Rajeev Chandrasekhar's official website - Member of Parliament


Ministry of Coal

TO BE ANSWERED ON August 13, 2012
Coal blocks allocated to companies



Will the Minister of COAL be pleased to state:

 (a)   whether it is a fact that several companies which had no experience in steel, cement, power or mining areas were allocated coal blocks by Government, without any auctions, between 2006 and 2009;

(b)   if so, the details thereof, year-wise and on what grounds coal blocks were allocated to such companies;

 (c)    whether it is also a fact that most of such coal blocks are still inoperative and some of the companies, which did not start coal production after getting coal blocks, were given additional coal blocks;

(d)   if so, the details thereof; and

(e)   what remedial measures Government has taken or proposes to take in the matter?




(a) to (b): Coal blocks are allocated to eligible public and private sector companies registered under the Indian Companies Act, 1956 for approved end-uses viz. generation of power, production of iron & steel, production of cement and production of syn-gas through coal gasification (underground and surface) and coal liquefaction for captive mining under Section 3 of the Coal Mines (Nationalization) Act, 1973. Coal blocks could be allocated for the specified end use projects to be set up as well as for the existing specified end use projects. No coal block has been allocated so far by auction through competitive bidding.

(c) to (e): A total of 195 coal blocks stand allocated to various public and private sector companies. Out of the allocated cq.al blocks, 30 coal blocks have started production. The remaining coal blocks which have not started production so far, are in various stages of obtaining statutory clearances and mining lease, preparing mining plan, acquisition of land, procuring machinery and equipment etc. for both mining as well as end-use project.

Development of coal blocks involves a gestation period of 3 to 5 years for reaching the production stage and another two to three years for reaching the optimal production capacity. As per the guidelines, coal production from captive coal block should commence within 36 months (42 months in case the area falls in forest land) in case of open cast mines and in 48 months (54 months in case the area falls in forest land) in case of underground mine, from the date of allocation. If the coal block is not explored, additional two years are allowed for detailed exploration and three months for preparation of geological report.

The responsibility of developing the coal block as per the prescribed guidelines and milestone chart attached with the allocation letter rests entirely with the allocate company. In the terms and conditions of the allocation letters, it is categorically mentioned that in the event of willful delay in the development of coal blocks and in setting up of the end use project, the Government will take appropriate action to deallocate the said block. Further, the allocatees have to submit Bank Guarantee which remains valid at all the times till the production from the coal block reaches its peak rated capacity. The Coal Controller's office monitors on regular basis the achievement of different milestones. Government periodically monitors and reviews the development of allocated blocks as well as end use plants by the allocatee companies in the Review Meetings. As on date, based on the recommendations of review committee meetings held, the Government has de-allocated 25 coal blocks. Further, an Inter-Ministerial Group (IMG) under the Chairmanship of Additional Secretary (Coal) with representatives from the Ministries of Power, Steel, Law & Justice and Departments of Economic Affairs and Industrial Policy and Promotion has been constituted on 21.06.2012 which inter-alia would undertake periodic review and monitor the progress of allocated coal/lignite blocks and make recommendations on action to be taken including de-allocation, if required.





(a) & (b) The Western Ghats Ecology Expert Panel constituted by the Ministry of Environment and Forests has submitted its report to the Ministry. The Ministry is consulting the concerned State Governments, Central Ministries and has sought stakeholder comments and has not yet taken any view on the recommendations contained in the report. The Ministry is considering to constitute a High Level Committee to further examine the Western Ghats Ecology Expert Panel report.


(c) & (d) The Ministry of Environment and Forests has not received any complaints/representations in regard to massive construction activity resulting in large scale vegetation cutting. However, all the developmental activities including construction activity as listed in the schedule of Environment Impact Assessment Notification, 2006 under the Environment (Protection) Act 1986 require prior environmental clearance from the Central Government in respect of category A projects and from the State Level Environmental Impact Assessment Authority in respect of category B projects. The developmental activities requiring diversion of forest land and located near Protected Areas require relevant clearances under the Forest Conservation Act, 1980 and Wildlife Protection Act, 1972. The same regulations apply on the developmental activities including construction activity in the Ghats zones. The Ministry has also imposed moratorium for consideration of projects from Ratanagiri and Sindhudurg districts of Maharashtra up to 31st December 2012. Further, some parts of the Western Ghats zone have now been listed in the UNESCO Natural World Heritage List.