JSPL, Corporate Ispat to pay penalties; retain coal blocks

In its latest round of punitive measures against errant coal block holders, the coal ministry on Tuesday decided to levy heavy penalties on Naveen Jindal promoted Jindal Steel and Power (JSPL) and Corporate Ispat for failing to develop their allocated coal blocks besides de-allocating the Macherkunda block of Bihar Sponge Iron Limited.

The coal ministry's decisions came after its high-level inter-ministerial group (IMG) recommended that JSPL had done little to develop the block despite being served show-cause notices twice in November last year and May 2012.

While deciding against de-allocation of the block, the IMG headed by the ministry's additional secretary Zohra Chatterji asked for deducting the Bank Guarantee for Jitpur block in Jharkhand, which was allocated to it in February 2007.

On the recommendations of the Group, the ministry has decided to de-allocate the Macherkunda coal block of Bihar Sponge Iron Company citing that the firm has done nothing credible to develop it.

The coal ministry has also decided to deduct the bank guarantees of Corporate Ispat Limited's Chitarpur block also in Jharkhand.

The IMG said that the Chitarpur block, given to the company in September 2005 and was slated to come into operation in March 2009, did not meet the target date, as the block holders did not make adequate efforts. The Group has asked for deducting the firm's bank guarantee.

PUNITIVE ACTION

* JSPL and Corporate Ispat have done little to develop coal blocks since allotment, the IMG said

* The two firms would have to forfeit their bank guarantees

* The coal blocks allotted to them would not be de-allocated

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