Coal block auctions to wait till CBI wraps up allocation probe

The government plans to ease up on the auction of coal blocks till the Central Bureau of Investigation completes its inquiry into the earlier coal block allocations.

The investigating agency has requisitioned 10 more files from the coal ministry last week in addition to the 760 it already has,which insiders say are connected to the FIRs filed on Tuesday against Jindal Steel,its vice chairman and managing director Navin Jindal and former minister of state for coal Dasari Narayana Rao.

With the screening committee route for allocating of mines facing questions from the CBI,there is a growing feeling within the ministry that there should not be any overdrive to allocate fresh mines. Some of our senior officers have reasoned that we should go slow to make future distributions foolproof in terms of their allocation process. They have also reasoned that even competitive bidding route needs to be firmed up more through more stakeholder consultations, a source said.

On Tuesday,the ministry issued show-cause notices on 12 firms,including NTPC for delay in commissioning Talaipalli coal block and SAIL for Sitanala block. Others in the list include Bhushan Steel and Power and Abhijeet Infrastructure besides some state government entities.

The delay is despite the ministry issuing a notice on its website in May that it plans to auction mines while it has also appointed Crisil as consultants to decide on the parameters for the auction.

A coal ministry official said the way the present allocations are being scrutinised,there could be questions on the fairness of the auction route too like the possibility of the bidders forming a cartel. Besides,the coal-rich states have contended that since they are the custodian of minerals within their domain,their companies should get more mines for power generation,the source added.

Other ministries like steel,which had recommended blocks for steel companies too have begun to feel the heat of the CBI investigation. The steel ministry has begun an informal due diligence to ascertain the sort of companies which were recommended for allocation of blocks in the period 2006-09. The CBI has asked the steel ministry to share relevant information on the recommendations made for the companies and the fate of the blocks allocated to steel companies.

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In its probe the investigating agency while inquiring possible violations of the relevant provisions of the Prevention of Corruption Act,is also understandably examining whether there is any money trail involved in the cases. The government has so far allocated 195 blocks to various companies and have de-allocated 24 mines following the recommendations of the coal ministrys inter-ministerial group.