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PSU power companies appoint EMTA for their blocks

The state utilities of West Bengal, Karnataka and Punjab have engaged mining contractor EMTA as developer and operator for their blocks though allotment orders for the mines provide for appointing such agencies through a transparent selection process, officials said.

The state utilities earlier had their mines cancelled by the Supreme Court as they floated joint ventures with EMTA that held a 74% stake in the companies. Senior government officials said the state-run power companies have appointed EMTA as a contractor for the mines that have been re-allocated to them under the recent round of coal block allocation to public sector units (PSUs).

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“The vesting orders for coal blocks do not bar state-run companies from engaging mining contractors but the process of selection of the contractors has to be followed,” a senior government official said.

EMTA has also not deposited about Rs 3,300-crore additional levy imposed by the Supreme Court on operational coal blocks.

The coal ministry has received Rs 6,596 crore of the Rs 10,148-crore levy due from companies that operated coal mines till March 31. The remainder belongs mainly to blocks owned by EMTA joint ventures and other defaulters such as Arunachal Pradesh Mineral Development Corp and BLA Industries.

Companies had to pay the retrospective penalty for coal mined until September 24 by December 31, while the levy for coal mined until March 31 was to be deposited by June 30 to be eligible for future mining licences.

Monnet Ispat & Energy and CESC Ltd have not paid the second tranche of the levy, but have got coal blocks in the auction. Monnet Ispat has asked the coal ministry to adjust its receivables as compensation for a previous block against the levy.

The three state utilities and Damodar Valley Corp escaped the Rs 295 per tonne penalty and yet got blocks in the recent round of allotment to PSUs after the Centre altered a clause in the second coal ordinance making EMTA liable to pay the penalty.

An addition to Clause 3 (n) of the ordinance, now enacted as law, defines the “prior allottee” responsible for payment of the levy and says: “In case a mining lease has been executed in favour of a third party, subsequent to such allocation of Schedule I coal mines, then the third party shall be deemed to be the prior allottee.”

EMTA held a 74% stake in mining joint ventures executed with state government companies and Damodar Valley Corp. Karnataka Power Corp had written to EMTA asking it to pay its dues but the private mining agency declined to do so.

Power generating companies in Punjab and Karnataka, which are EMTA’s partners, paid 26% of the penalty for operational blocks for mining till September 2014, but declined to do so for the second tranche.

West Bengal Power Development Corp. and Damodar Valley Corp have not paid any amount toward the additional levy but have been awarded coal blocks under the dispensation route.


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