Eleven firms allotted coal blocks sans power ministry nod

Written by Indu Bhan | New Delhi | Updated: Jan 18 2014, 00:59am hrs
CoalOut of the 41 coal blocks, the AG said that around 27 coal blocks where no environmental and forest clearances have been obtained.
The coal ministrys screening committee had selected as many as 11 private companies including Tata Power, the Lanco Group, Reliance Energy, Balco and GVK for allocation of captive coal blocks in 2007-08 without any recommendation from the power ministry, though this was mandatory.

This has been confirmed by records placed by the coal ministry before the Supreme Court on Thursday. The court has reserved its verdict on various pleas seeking cancellation of the coal blocks allocated in violation of guidelines and rules during 1993-2005 as well as 2006-09.

The screening committee, the coal ministry records reveal, also overlooked the power ministrys recommendations for allocation of coal blocks to eight companies/projects including Vedanta, Bhushan Energy, Maithon Power, Lanco Amarkantak. Mahabir Global, TRN Energy and Rashmi Cement.

The screening committee is headed by the coal secretary and includes senior officials from ministries concerned like power, steel and railways and the department of industrial policy and promotion, besides chief secretaries of states where the coal blocks are located. This mechanism was used by the coal ministry to allocate captive coal blocks on a nomination basis to companies for their end-use projects in sectors like power and steel until competitive bidding was adopted in February 2012.

In 1993, the Centre amended the Coal Mines Nationalisation Act to pave the way for allocation of captive coal blocks to public and private companies in the power, steel and cement industries to meet fuel requirements of their projects on an assured basis. Since then, more than 200 blocks have been allocated to captive users, of which 61 went to private players. However, this mechanism did not help increase domestic coal availability as most of the blocks are yet to start production.

Attorney general GE Vahanvati informed the SC on Wednesday that the government had initiated a status review of 41 out of the 61 coal blocks allocated to private companies where production was yet to begin.

Out of the 41 coal blocks, the AG said that around 27 coal blocks where no environmental and forest clearances have been obtained, four where state governments have not executed mining leases in spite of all approvals and around 10 coal blocks where stage II environmental clearances (compulsory afforestation, etc) have not been granted are in the process of being deallocated.

He said that due notices will be given to allottees to obtain and submit proof of clearances, failing which a decision will be taken to deallocate blocks in four to six weeks.

The court also permitted the CBI to investigate the money trail in foreign countries after the investigating agency submitted that one of the companies had a connection with the Malaysian government and a powerful member of the Malaysian government was blocking the investigation by the Enforcement Directorate.

While the fresh status report filed by the CBI earlier this week will be taken up for consideration on February 10, the apex court asked the ED to submit status report on alleged money laundering.

According to a Comptroller and Auditor General report, bungling in the allocation of coal blocks has resulted in a loss of Rs 1.86 lakh crore to the nation.