The Ministry of Coal (MoC) has issued a show cause notice to Orissa Mining Corporation for the inordinate delay in the development of Utkal-D coal block under the command area of Mahanadi Coalfields Limited (MCL).
In its showcause notice to OMC dated September 29, the MoC has asked OMC to respond to the notice within 30 days failing which it would be assumed by the ministry that the company has no explanation to offer and appropriate action will be taken to de-allocate the said coal block.
When contacted by Business Standard, Saswat Mishra, managing director of OMC said, “We have received the showcause notice of the coal ministry and we will respond to it soon. The development of the coal block has been held up due to pending forest clearance.”
The company is yet to get the forest clearance for the project as there were issues relating to shareholding of the coal block. As per the original scheme of things, OMC was to hold 74 per cent stake in the coal mining project while the remaining 26 per cent share was to be held by Delhi-based Sainik Mining.
However, the shareholding pattern has changed of late. While OMC would still have the controlling stake at 51 per cent, Sainik Mining would hold 49 per cent.
The new equity sharing pattern has been finalized and we will inform the same to the MoC in our showcause notice, said Mishra.
In the last review meeting held by the MoC on July 21 this year on the progress of the Utkal-D coal block, it was noticed that no serious efforts were made by OMC to develop the coal block even after repeated assurances made by the company.
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Moreover, some of the critical milestones like forest clearance and land acquisition are yet to be achieved. The coal block was allocated to OMC by the ministry on December 19, 2003.
The MoC has also observed that OMC has repeatedly failed to keep its promises made on earlier occasions and is non-serious about the development of the coal block.
OMC has suffered delays in achieving some important milestones. While land acquisition was scheduled for completion by December 19, 2006 it is yet to be completed. Similarly, the forest clearance for the project which was scheduled to be in place by June 19, 2005 is also pending.