For 7 months, Jaiswal sat on file on coal block allocations

For nearly seven months, Coal Minister Sriprakash Jaiswal sat on a file that sought his direction on keeping captive coal block allocations on hold until the new competitive bidding system was launched.

The then Coal Secretary, C Balakrishnan, sent the file on July 20, 2009 seeking the minister’s decision on “whether allocation of coal blocks should continue as per the extant policy in practice or this should await enactment of MMDR Amendment Bill 2008 which seeks to introduce competitive bidding system”.

The query was specific to allotting coal blocks already awarded by the screening committee as the proposal also asked Jaiswal to decide if the screening committee route could be continued for the remaining blocks.

“Decision is required whether the remaining blocks should be further sub-divided/ earmarked for allocation under the government company dispensation and screening committee routes separately,” it said.

The reason for seeking the minister’s opinion on putting the process on hold was the standing committee’s direction that all allotments be stopped until a review was conducted into the progress of work in coal blocks already allotted.

“The committee has suggested that firstly, the ministry should review the status of the development of coal blocks already allocated and in the event of coal blocks not being developed as per the prescribed time frame, these should be de-allocated and only such blocks should be disposed of through auction. Only on completion of this exercise, new blocks may be allotted through competitive bidding,” said the ministry’s proposal.

Despite the urgency and importance in light of the parliamentary committee’s observation, the minister kept quiet on these issues until February 9, 2010 when he sent the file back for further review.

“In the light of decision taken by Cabinet on allocation of coal blocks for captive mining through competitive bidding, the proposal may be re-examined and put up,” he wrote.

Though no blocks were offered or awarded once the Mines and Minerals (Development & Regulation) Amendment Bill was introduced in October 2008, allotment letters continued to be issued for captive mining of 18 coal blocks to 41 private firms that had been selected earlier by the screening committee.

Of these, 16 firms got eight coal blocks after the ministry first raised the issue in July 2009. Some of these were recently de-allocated by the Inter Ministerial Group.

When asked about the delay, the Coal Ministry told The Indian Express that the proposal was “with reference to initiation of the process for identification of new blocks, followed by an advertisement calling for applications and so on and so forth and not related to decisions already taken on the applications called for before the introduction of the MMDR Amendment Bill in Parliament”.

“Coal Minister appreciated the position, particularly in light of various observations, including standing committee’s, and did not agree to the allotment of blocks as per extant policy. It took time essentially because the question of allotment to Coal India Ltd was being considered and this was also not done in the intervening period,” it said.

But Jaiswal’s reason for delay on account of allotments to Coal India holds no ground as the proposal was amply clear that the state-run firm be given 137 blocks with 57.5 billion tonnes of geological reserves to sustain the production level of 664 million tonnes per annum by 2016-17.