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Coal mining, power and steel firms oppose coal block de-allotment

Arguing that the letters allotting coal mines were not "innocuous friendly letters" but created a "legally enforceable right", coal mining, power and steel companies on Thursday strongly opposed before Supreme Court the move to cancel the allotment letter. Many of them got their allotments long ago but could not secure a mining lease for want of government clearances.

The companies said that the government could not walk away citing forest and environment clearance delays for which the particular state governments are responsible.

On a day when the three-judge bench headed by Justice R.M. Lodha, after a hearing spanning over a year, reserved its judgment on the validity of the coal block allocations between 1993 and 2008, firms made a last ditch effort to convince the court.

Taking up the cause of power producers and sponge iron manufactures, senior lawyer Harish Salve submitted: "What is being proposed is very unfair. Centre says you set up power plants and we will give you coal blocks. We invest thousands of crores and after the plant comes up the centre says now we cannot give coal blocks citing delays which in fact are beyond our control".


On the primary objection raised by the court that it was wrong for the Centre to invite application for blocks directly when the mining law said it only had the power of approval of an allottee selected by a particular state, Salve said "Centre was the supreme authority on coal allocation after the nationalisation policy and only the power of certain clearances at later stage were vested with the state."

Senior lawyer K.K. Venugopal who appeared for the Association of Coal Miners said, "Allottees who had taken diligent steps within the various milestones fixed could not be penalised if the delay was on the part of environment ministry or government officers who failed to perform their duties well before time. In other words, no person could take advantage of his own wrong."

The de-allocation move came after Supreme Court asked Attorney-General G.E. Vahanvati on January 9 what the Centre planned to do with the 61-odd coal blocks where allottees were waiting for mining leases and observed that there shall not be indefinite "wait and watch".

"De-allocations would have a long-range financial impact on the economic development of the country, its GDP, its export earnings, the well-being of thousands of families employed in the end-use industries, the taxes and revenue which the Government would earn and render useless a total investment of Rs.2,86,677 crores. It would also result in guarantees being recalled by the Government and the Banks being unable to recover the monies resulting in Non-Performing Assets (NPAs) of over Rs.1,00,000 crores", argued Venugopal.

"The greater public interest would be served by issuing positive directions for expediting clearance and approvals by the various wings of the Government, rather than cancelling the allocations", he said.

The court was scrutinising allocations since 1993 after admitting two PILs filed by lawyers Prashant Bhushan and M L Sharma that sought cancellation of coal block allotments on the ground that rules were flouted and certain companies were favoured. After examining allocations of 195 blocks between 2006 and 2009, 1993 and 2004, and under the government dispensation scheme, the CBI found irregularities in 16 of them for which separate FIRs have been filed.

Notice to 61 coal block allottees

Coal blocks which have not obtained environment and forest clearances face the threat of de-allocation after the Centre on Thursday issued show-cause notices to all 61 of them.

In a letter to the 61 allottees, S.K. Shahi, director in the coal ministry said three categories of coal blocks- where environmental clearance and forest clearance Stage-I (in-principle) have not been obtained, which are unexplored or partially explored at the time of allocation and where prospecting licence (PL) has not been obtained, and those where PL has been issued but geological reports have not been prepared-will be cancelled.

Tata Steel, Arcelor-Mittal, Hindalco, Jindal Steel and Power, JSW Steel, Essar Power, Adani Power, Tata Power, GVK Power and Infrastructure, Ultratech Cement, Reliance Energy, Sterlite Energy and JP Associates are some of the allocatees who feature in the list of 61.

Some blocks, which are already under the scrutiny of the CBI such as Mahan (Essar Power and Hindalco), Brinda Sasai and Meral (Abhijeet Infrastructure) and Bander (AMR Iron and Steel) also figure in the list.

Fatehpur coal block, allocated to SKS Ispat & Power Ltd, the company allegedly linked to former Union Minister Subodh Kant Sahay, is also a part of the list. The allocatees have been given time till February 5 to obtain the requisite clearances and produce proofs in support of approvals.

Within a week thereafter (after Feb 5), a decision for de-allocation will be taken, the letter said, adding that this notice supersedes all previous notices on the matter. It said allocatees who have secured forest and environmental clearance Stage-I and have applied for FC (final clearance) Stage-II have time till February 12 to submit their responses along with documentary evidence to their claims.

The list of 61 blocks include Kotre Basantpur and Pachmo and Ganeshpur blocks of Tata Steel, Seregarha (ArcelorMittal and GVK Power), Tubed (Hindalco and Tata Power) and Lohara West and Lohara Extension (Adani Power). Jindal Steel and Power's three blocks - Utkal B1, Gare Palma IV/6 and Jitpur are also part of the 61.

Rohne, jointly allocated to JSW Steel and Bhushan Power and Steel, too figure in the list. Mandakini block (Monnet Ispat and Energy, Jindal Photo and Tata Power), Rampia and Dipside of Rampia blocks (Sterlite Energy, GMR Energy, Lanco, ArcelorMittal, Reliance Energy and Navabharat Power) are also in the list of 61 blocks.

Source: indiatoday.intoday.in