With just a week left of this Parliament session, the government is keen to end the paralysis caused by the "coal-gate" scandal. The Opposition has said that it will only allow discussion and debate in Parliament if the government agrees to cancel the allocation of 142 coal fields, and commissions a judicial inquiry to dissect how those licences were issued. Last month, a report by the national auditor said private firms reaped windfall benefits of upto 1.86 lakh crores because of a poor coal policy implemented by the government, a finding argued aggressively by the PM and his senior ministers.
In what could help defuse the crisis, or at least pave the way for a compromise with the BJP, nearly 60 coal blocks could be de-allocated soon. An inter-ministerial group set up in July will meet today. It has found that 30 blocks given to the private sector and another 28 given to state-run companies deserve to lose their licenses for non-performance. The panel has found that these fields are unlikely to produce any coal by March 2013, and should therefore be handed over to the state-run Coal India Limited.
The inter-ministerial group is studying 90 coal blocks allocated since 1993 by different governments that were in power. The 60 coal blocks that could be de-allocated include seven that were assigned by the earlier NDA government.
The same review committee will also scrutinise another 30 coal blocks. A note earlier this month from the inter-ministerial panel asks for the de-allocation of two Jharkhand coal blocks given to Jindal Steel and Power Limited, owned by Congress MP Navin Jindal and Usha martin, owned by the Jhawar family.
Documents accessed by NDTV show that the Prime Minister's Office intervened last month to insist on urgent action against those companies who have failed to take any steps towards making their coal blocks operational. Letters show that after initially being reluctant about punishing firms, the Coal Ministry did a U-turn, possibly after Dr Manmohan Singh's office suggested non-performers should lose their licences.
The ministerial review committee, on July 25 recommended to the Coal Ministry that the licences of these firms be cancelled. Nearly a month later, on August 21, Coal Secretary SK Srivastava asked why a recommendation for action was being made at a time when guidelines for revoking licences have not yet been formalised. On August 23, the head of the ministerial committee, Zohra Chatterji, who is also the Additional Coal Secretary, responded that the existing terms for licences allow for cancellation if a company does not show satisfactory progress in developing mines. Ms Chatterji also pointedly said that it was upto the Coal Ministry to accept or ignore recommendations.
The Coal Secretary is unhappy that the inter-ministerial panel did not give the companies concerned an opportunity to defend themselves, sources said. Mr Srivastava raised a similar point with Ms Chatterji in similar correspondence. She responded by saying in a note that a detailed report of the companies' responses to their show cause notices has not been readied because the concerned department within the Coal Ministry is "overburdened with work related to a CBI inquiry".
However, officials from the concerned companies said this is not a valid reason for recommending de-allocation. They said they had replied to the show cause notice that was sent to them in April by the government but their answers had not been taken into account by the committee that had recommended the cancellation of licences.
"Cancellation of coal blocks allotted since 1993 (including NDA regime) where no development has taken place will defuse current crisis ....Out of 99 Blocks allocated to Private players since 1993, 60 coal blocks with 6.7 billion tonnes (ER) valued at nearly Rs.
2 lakh crores can be cancelled due to lack of progress as ascertained by Ministry of Coal in the meeting of January 2012," says an internal note prepared for today's meeting of the inter-ministerial group.
The same committee has also been asked to now study another 30 coal blocks for similar reasons.
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