Cabinet defers coal block allocation to firms including those not under CBI scanner

Following Vahanvati’s suggestion, the coal ministry has decided to withdraw its advice to the states.

The Cabinet on Thursday deferred a plan to allocate coal blocks to companies, even if there is no CBI inquiry against them. It did so by withdrawing its circular to state governments to go ahead with the allocations. The postponement by the Cabinet followed a briefing by the Attorney General GE Vahanvati.

In his briefing, Vahanvati informed the ministers in the Cabinet Committee on Economic Affairs (CCEA) that the Supreme Court has refused to split the coal blocks into those against which there is a CBI inquiry and those where no case has been registered.

In question are the 61 blocks, whose details have been furnished to the Supreme Court by the government. While the allocation of only some of them has been booked by the CBI, the CCEA is unable to allocate the remaining too to new parties.

These mines had got some or the other clearances from the government before February 2012, but were pending thereafter. While the states led by Orissa had told the coal ministry that they would prefer to wait till the Supreme Court issues orders before issuing mining leases, the coal ministry earlier this month had asked them to go-ahead.

On Thursday’s meeting of the CCEA, the Attorney General conveyed the Supreme Court’s decision that since it is seized of the matter, the coal ministry should not take a call on any of the non-controversial ones too.

The CCEA was apparently divided on the topic and decided to wait for the next hearing by the court. While, on one hand, the government is struggling to ramp up coal production by asking Coal India to open fresh 15 opencast projects having reserves of nearly 800 million tonnes, it is also expediting moves to set up a massive evacuation infrastructure to ferry the mined coal to the railway network.

Coal India Ltd’s chairman S Narsing Rao is worried that his company may miss the production target of 482 MT for the 2013-14 by around 5 MT, which is over and above the loss of 1 MT due to shutdown in the PSU’s Talcher mines. Against this backdrop the government is keen to bolster the output from the captive mines and is eager to auction them to ensure an output of over 100 MT by 2016-17 from them.

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Following Vahanvati’s suggestion, the coal ministry has decided to withdraw its advice to the states. The coal ministry had on January 15 served a three-week ultimatum to the allocatees of 61 blocks belonging to private companies where mining leases have not been executed to furnish the proof of the requisite clearances obtained by them to operationalise their captive mines.