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Owners of cancelled coal blocks to be compensated

With the promulgation of the Coal Mines (Special Provisions) Ordinance, the government plans to compensate owners of cancelled coal blocks.

As a first step, allottees of 204 coal blocks have been asked to furnish details of investments for land acquisition and development of mine infrastructure.

If no information if provided by the November 10 deadline, it would be presumed that no investments were made, and, hence, no compensation payable, a letter to the allottees said.

"There is a provision for valuation of compensation for payment to prior allottees for land and mine infrastructure....In this context, it is requested to provide details of land and mine infrastructure as per the proforma enclosed duly certified by the authorised signatory within a fortnight, ie, by November 10 positively," the letter said.

The compensation for land would be the cost of land at the time of acquisition plus an interest of 12% a year, payable for the period from the date of acquisition till the date of vesting or allotment, according to the Ordinance.
 For acquisition cost, registered sale deeds have to be furnished, the letter said.

What are the expenses allowed to be shown as mine infrastructure?

Investments towards land demarcated for afforestation and rehabilitation and re-settlement of project- affected persons, and infrastructure like civil works, workshop, equipment, electrical systems, communication systems, site offices, crushing machines, conveyor systems, railway sidings, but not movable equipment, have been allowed.

If a prior allottee becomes a successful bidder in the forthcoming auction, compensation payable by the government would be adjusted against the bid money payable by the allottee, the Ordinance has clarified.

For all assets and infrastructure, the value appearing on the balance-sheet date for 2013-14 would be accepted with no recognition for the post period investments.

If a prior allottee doesn't win an auction, compensation wouldn't be paid till the additional levy paid, the Ordinance says. The levy has been fixed at Rs 295 for every tonne of coal extracted.

This is the rate suggested by the Comptroller and Auditor General. The aggregate additional levy, if fully realised, would amount to a windfall of Rs 9,000 crore to the government.

Source: DNA