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Rediff.com  » Business » Govt bites the bullet, says 41 firms may lose blocks

Govt bites the bullet, says 41 firms may lose blocks

January 16, 2014 14:04 IST

The Centre on Wednesday told the Supreme Court it would examine the current status of development in 61 coal blocks allocated to companies, on a case-by-case basis, and take a decision within six weeks.

Blocks held by companies that failed to get the mandatory clearances to start mining operations could be cancelled. The exercise will affect the fate of 41 companies.

“There will be no further delay. Everything will be time-bound now,” Attorney-General G E Vahanvati told the apex court in a hearing in the alleged Rs 1.86-lakh-crore coal block allocation scam.

The court repeatedly asked the government to explain the huge delay in according clearances and the start of operations over the period. The attorney-general replied the process got stuck over multiple clearances. The counsel argued that keeping the process pending was not in the public interest and cases would now be examined within a timeframe.

Earlier this month, the Centre had told the court it would make its stand clear on cancelling the allocations to private companies since 2005 but conceded that “in hindsight, we can say something has gone wrong, and some correction is required to be done”.

Only 35 of the 218 captive blocks allocated since 1993 have started production. The coal ministry has cancelled 51 blocks in the past two years on grounds of delay. These include those held by Jindal Steel & Power (JSPL), Monnet Ispat, Birla Corporation, Rathi Udyog, Dalmia Cements and Sunflag Iron & Steel.

A Supreme Court Bench headed by R M Lodha received the Central Bureau of Investigation’s (CBI’s) status report in the case and on Wednesday reiterated that there appeared to be no guidelines or criteria to determine the coal block allocations. It added the scrutiny committee did not follow any known procedure and appeared to be acting arbitrarily.

The Bench noted that of the 118 applications for blocks, 44 were shortlisted and 20 were selected. Eight applications were rejected without giving any reason and 11 were recommended. “There is no sign that merit was examined,” the judges observed, asking the government to explain the disparity.

While the attorney-general promised to disclose the guidelines and the process of selection to the court on Thursday, Prashant Bhushan, counsel for social organisation Common Cause, intervened to say the companies were supposed to start operations within five years of getting allocations but many had not started production so far. The government should be told to provide information on the end users, as it was in the public interest to know how natural resources were being allocated to private companies, he said.

Meanwhile, CBI, which is investigating 195 coal block allocations made between 1993 and 2009, decided to take its probe to foreign shores. It will soon send a judicial request to Malaysia seeking information about a company with which one of the accused Indian companies had shown a tie-up to bag a coal block in Chhattisgarh. On Wednesday, it filed an application seeking the court’s permission to move a letter rogatory.

CBI has so far filed 16 first information reports (FIRs) alleging cheating and criminal misconduct. In one case, the Indian partner, which was not named, has to be examined with regard to the genuineness of the documents submitted. The court did not pass any order on the application.

BS Reporter in New Delhi
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