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Government to meet prior allottees of coal blocks to work out compensation

06 Feb 2015 Evaluate

Amid mounting concern over the successful auction of coal blocks, the government has called a meeting of 23 companies that owned coal mines that were cancelled, amid spate of legal challenges principally related to compensation and disputes over the quality of some information in the bid documents, particularly with regard to the quality of coal. The meeting is likely to be held under the chairmanship of former Chief Vigilance Commissioner Pratyush Sinham.

The ministry has called CESC, GVK Power, Electrosteel, Hindalco, Jayprakash Associates, Monnet Ispat, Jayswal Necco among others for the meeting. Miners say the government's tender documents exaggerate the quality of coal in several operational mines, and offer no compensation for land taken on lease for mining. GVK Power has already approached the Delhi High Court saying its actual expenditure on building mining infrastructure was significantly higher than what the government has evaluated.

The companies are also claiming that the coal grades mentioned in some cases are at least 20% higher than the real and the whole bidding could be affected with the factual error in the coal grades. Earlier, the ministry had asked the the mine owners to furnish details about the mines, investments made and people employed in order to determine the compensation to be paid against. Though, the ministry is not relying on the data furnished by the companies while putting together the bid documents.

The ministry has also asked owners of 74 blocks in Schedule II and III to share information failing which it would be assumed that no investments have been made by them in the mines and hence no compensation would be payable to them.

The fresh bidders of the coal blocks include the Vedanta group, which has put in the maximum number of bids;  Adani Power and GMR Energy which have bid for all six coal blocks reserved for  the power sector; Essar Power four blocks; Jindal Power three blocks, while Reliance Power has bid for two coal blocks.

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