Sudhir Kant Sahay is honorary executive director of the company

Even as it decided on Monday to cancel the allocation of the Gourangdih ABC block in West Bengal, owned by Sajjan Jindal’s JSW Steel Ltd. and Himachal EMTA, the Coal Ministry delayed action against SKS Ispat, linked to Sudhir Kant Sahay, brother of Union Tourism Minister Subodh Kant Sahay, leading to speculation on political pressure on the issue.

The IMG had met on September 15 and reviewed the allocation of four coal blocks and recommended de-allocation of two. These included the Fatehpur block of SKS Ispat in Chhattisgarh, in which Mr. Sudhir Kant Sahay is an honorary executive director.

On June 2, 2008 SKS Ispat bagged this block with extractable reserves of 87.6 million tonnes.

There is intense speculation on the delay by the Ministry in taking action against SKS Ispat. The IMG had reportedly recommended that its allocation be cancelled.

The Ministry has also accepted the IMG’s recommendation on forfeiture of bank guarantees (BG) of the Bijahan and Radhikapur East coal blocks in Orissa, allocated to Bhushan Power and Steel and Tata Sponge Iron Ltd.

The Bijahan block was allocated in 2006 and it holds total extractable reserves of 161 million tonnes.

The Tata Group-owned Radhikapur East block holds extractable reserves up to 105.24 tonnes.

The CAG report presented to Parliament on August 17 said coal block allocations led to a presumptive loss of Rs. 1.86 lakh crore.

“Undue gains”

Another de-allocated mine, the Gourangdih ABC coal mine — allotted in 2009, with extractable reserves of 61.54 million tonnes and meant to be used for a power project — had found mention in the CAG report which said the allottees located in West Bengal might have made undue gains to the tune of Rs. 1,818 crore.

The IMG is scrutinising 29 blocks awarded to private parties out of the total 58 in respect of which show-cause was served for delay in development.

The government has approved cancellation of licences of five coal blocks, out of seven recommended by the IMG so far.

The IMG met on Monday to take a call on six other blocks. However, not many details were available of the meeting. The meeting also decided to recommend deduction of bank guarantee in the case of a mine jointly allotted to the Aditya Birla Group’s flagship firm Hindalco and Tata Power due to delay in development of the block allotted in August 2007.