The two coal blocks in Odisha and Chhatisgarh are expected to fuel 4,500 MW of new power generation capacity being set up by NTPC that could be delayed if these blocks are not freed from encumbrances, NTPC.

The private firms, on their part, stress that they have rightfully acquired the land in question with all due clearances. Jindal Steel and Power Limited (JSPL) has laid two underground pipelines across the Chandrabila coal block in Odisha allocated to NTPC. Monnet Ispat and Energy Limited is acquiring land parallel to this stretch, to lay its own pipelines.

Within NTPC's Bhalumuda coal block at Chhattisgarh, an area of about one square kilometre has been occupied and fenced by Sarda Energy & Minerals Ltd or SEML. Senior government officials said that the power ministry has flagged the problem with the cabinet secretariat and the coal ministry has decided to write to these private players to stop all activities on these coal blocks till the issue is resolved.

An NTPC spokesperson confirmed that the issue has been taken up with the government for resolution. NTPC has also urged the coal ministry to ask the state governments to surrender any rights of way granted to the private firms on these blocks.

"Since issuance of formal allocation letters and signing of 'coal mine development and production agreement' pertaining to these coal blocks are at a final stage in the coal ministry, NTPC has requested the ministry to resolve the issues," the spokesperson said.

"Presently detailed exploration is being carried out in Bhalumuda and Chandrabila coal blocks by the Central Mine Planning and Design Institute Limited or CMPDIL," she added.

The third party occupations on its coal blocks, allocated in July 2013, came to light during CMPDIL's exploratory work and the firm has submitted a separate 'factual report' on the issue to the coal ministry, an official said. JSPL told ET that it had acquired the land in question in 2009 and set up the pipeline after receiving all due clearances in 2010-11.

"The acquisition of the stretch of land in the said block was done by the Odisha Industrial Infrastructure Development Corporation or IDCO and on the administrative approval of the Odisha government's steel and mines department for laying the water pipeline to meet their water requirement from river Brahmani," a JSPL spokesman said.

"The plant is meeting its water requirement through the same pipeline," the JSPL spokesman said, stressing that the firm has not received any communication on this issue from either the authorities or NTPC.

The Monnet group has set up a1050 MW power plant in the same area, backed by a captive coal mine in Angul, and the company is expanding this plant's capacity by another 660 MW.

"On the face of it, we have a pipeline of 20 km being laid alongside the one already laid by JSPL. Most of it is in the private land and safety zone of Mahanadi Coalfields which otherwise is an area which is useless and would not be utilized by it. We have all the requisite permissions and the right of way," said a senior Monnet group official.