NEW DELHI | Jan 30, 2015: Prior owners of operational coal blocks are in a shock as the government has approved very low compensation for investments made at the mines. In some cases, the valuation approved by the government is just over 1% of the investment claims made by the developers.
The coal ministry uploaded the valuations for the mine infrastructure late on Wednesday and, hence, extended the deadline for submission of technical bids by three days to February 3. The ministry has classified select infrastructure as 'mine infrastructure' essential for continuing operations at the blocks while the companies claimed compensation for almost everything, a senior government official said.
Valuation of assets in most cases is far less than half of the claims made by prior allottees, he said, adding in some extreme cases, it is about 1% of the claims. The official said the government abided by the provisions in the ordinance that defined mine infrastructure and, thus, could not account for the 'work in progress,' that gets reflected in the balance sheets only after completion.
Movable and intangible assets were not valued as mine infrastructure. The government has limited the compensation to acquired land and mine infrastructure but has not accounted for land that was taken on lease by coal miners from state governments, an executive with one of the bidding companies said on condition of anonymity. The government had formed a committee headed by former central vigilance commissioner Pratyush Sinha to assess the compensation to be paid for taking over blocks that were running or ready to produce from next April.
(Source: http://economictimes.indiatimes.com/)