Coal ministry orders appropriation of NTPC’s security deposit

Coal ministry had charged NTPC with failure to adhere to the efficiency parameter to launch production from Chatti Bariatu coal block in Jharkhand

NTPC net profit

New Delhi: The coal ministry has asked a Delhi branch of the State Bank of India (SBI) to appropriate ₹33.26 crore from the bank guarantee of National Thermal Power Corporation (NTPC Ltd) for its failure to comply with the stipulated efficiency parameters for production of coal from Chatti Bariatu coal block in Hazaribag district of Jharkhand.

The coal ministry issued the letter for partial appropriation of the NTPC’s bank guarantee to the SBI and the power major after giving ‘adequate’ time and ‘opportunity’ to the latter to explain the reasons for inordinate delay in bringing the two mines in Chatti Bariatu coal block to production. The ministry had allotted the mines to the NTPC in March 2015. However, the mining operation from any of the mines could not start till 2021-22.

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As per the agreement signed with the coal ministry in 2015, the NTPC had furnished the performance bank guarantee of ₹136.60 crore in the CAG branch of the SBI, New Delhi, in lieu of mines’ allotment. The coal ministry had issued the demand order to deduct 24% of the total performance security to the bank and asked the NTPC to top up the bank guarantee amount within 15 working days after the NTPC failed to start production within the stipulated period.

In the letter issued by additional coal secretary M Nagaraju on Tuesday, the coal ministry stated that the allotment of mines might be cancelled if the NTPC refused to replenish the security deposit within the stipulated time.

NTPC challenges coal ministry’s order in high court

Upset by the decision, the NTPC challenged the coal ministry’s order on confiscation of the bank guarantee. A senior officer of the NTPC, who is dealing with the matter, said that the court had stayed the coal ministry’s order about realisation of the part bank guarantee and fixed Thursday as the next date of hearing.

Also Read: Coal ministry redoes bank guarantee norm, reschedules biding date

Chatti Bariatu and Chatti Bariatu south coal mines are the other coal mines allotted to the NTPC in Hazaribag of Jharkhand after Pakri Barwadih coal mines, which became operational in 2016. Regional executive director (coal mines), NTPC, Partha Mazumder said that the power PSU would be producing about 7 million ton coal per annum from the two mines to cater to the supply of different thermal power plants in the region.

Mazumder said that coal production from both Chatti Bariatu and Chatti Bariatu-South mines has started last year.

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