Investigate all coal block allocations since 1993: Panel

Calling coal mine allocations done in 1993 to 2010 as "unauthorised and illegal", a Parliamentary panel on Tuesday suggested scrapping of mines that have not started production.

Last Updated: Apr 24, 2013, 09:02 AM IST

New Delhi: In a damning attack on licensing policies of various governments, an overwhelming majority under UPA, a Parliamentary Committee Tuesday said the controversial coal block allocations were "unauthorised and illegal" and demanded scrapping of mines where output has not started.

Slamming coal mine allocations between 1993 and 2010 as "largesse distributed to a few in total abuse of power", the Standing Committee on Coal and Steel said "several coal blocks were allocated to a few fortunates without disclosing the same to the public at large."

Neither any auction was held nor any revenue accrued to the government from the allocations, the report said adding the entire decision making process for distribution of coal blocks needs investigation.

"Necessary penal steps should be taken against everyone who was directly or indirectly party to such decision making process," it said in its report tabled in Parliament today.

In all 218 coal blocks were allocated between 1993 to 2010 -- 5 under P V Narasimha Rao government, 4 under H D Devegowda, 32 under Atal Bihari Vajpayee government and 175 under Prime Minister Mamohan Singh. "Distribution of coal block was greatest example of betraying public trust by the government," it said.

The panel, headed by TMC leader Kalyan Banerjee, said that all coal blocks alloted to the private companies where production has not started yet should be cancelled immediately and PSUs warned to start mining work at the earliest.

"The state and central government PSUs should not allow private parties to extract coal from coal mines that are allocated to them," it said.

"The natural resources and state largesse were distributed to few fortunates for their own benefit without following any transparent system, was total abuse of power by the government.

"The government cannot give largesse on its arbitrary discretion or its sweet will," the committee said adding even though applications were sought for coal block allocation in 2005 and 2006, no bidding process or auction was held.

"Distribution of mines was done in a most unauthorised manner," Banerjee said after laying the report in Parliament.

The report said the allocations were illegal and amounted to huge losses to the state exchequer.

However, on the quantum of losses Banerjee said, "Despite our repeated queries, Coal Ministry could not give us information in respect of quantity of coal or its value. We are not investigating agency and thus not in a position to assess the losses."

The report said: "It is unfortunate that for allocating coal blocks neither any auction was held nor the Central Government earned any revenue."

When asked whether Trinamool Chief Mamata Banerjee, who was Coal Minister in the NDA government was also involved, Banerjee said, "Every Coal Minister is not party of the allocation process."

The Committee said it was "surprised" to note that between 1993 and 2004 no data was maintained by the Coal Ministry regarding number of applications received seeking mines while no "bidding process or auction was held."

Citing delays in development of blocks by private firms, the Committee also sought an explanation from the Ministry on and demanded a list of such companies, which were alloted mines without any end-use projects.

"Out of 195 coal blocks allocated so far for captive mining, 30 blocks have started coal production and out of 160, captive coal blocks allocated during 2004 to 2008, only 2 have started production," it said.

Saying that such allocations have not generated any revenue and only helped private firms, the panel said: "The commencement of coal production only from 30 coal blocks out of total allocated 218, puts a question mark over the performance and efficiency of allocatee companies, especially private companies which have a major share in allocation."

The Committee said it was "astonished" to find that although 195 blocks with 44.23 billion tonnes of reserves were allotted, no estimates for the value of coal extracted was made by the government. It emphasised the need for introducing a proper mechanism for correct evaluation.

Commenting on the report of the Parliamentary Standing Committee, Monnet Ispat and Energy Ltd said it had completed the job on time and the delays were made on the Centre and the state governments part.

"We would like to mention that whatever job was in the domain of Monnet as a coal block developer was completed well on time whereas whatever was to be done at the centre and state government level has been delayed which is beyond the control of any private developer," it said in a statement.

Monnet's Utkal-B2 block in Odisha, allocated in 1999, was cited by the Committee as a prime example of delay as the block got stage-II forest clearance in July 2011.

Due to this, the Committee said production from the block, which was supposed to begin in February 2003, had not yet begun.

Citing the example of Odisha, Monnet said that land acquisition process in the state is very cumbersome and it has led to delays in developing coal blocks the company has in the state.

"The land acquisition process in Odisha is very cumbersome. There is a nodal agency IDCO with which we deposited approximately Rs 50 crore towards the 100 percent cost of the land.

"The IDCO also could not disperse money at the ground level for so many years. This was the main reason of delay. Now everything has been completed and we are in the process of signing the mining lease and will start production immediately after that," Monnet said.

According to the company, these facts were also evaluated by the Inter-Ministerial Group (IMG), constituted by the Coal Ministry last year to evaluate the progress made by the developers of coal blocks.

"They appreciated the efforts and the development made by Monnet on the block and also the problems faced by the company because of which they did not recommend the deallocation of our block," the company said.

Monnet Ispat has five coal blocks in Odisha, Chhattisgarh and Madhya Pradesh.