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Private companies got undue gain in coal block allocations, Maharashtra govt tells SC

In an affidavit in the Supreme Court, the Congress-ruled Maharashtra government has said the allocation of coal blocks made through the screening committee route resulted in "undue gain" to private companies. It has asked for blocks with pending mining leases to be taken back and re-allocated through auctions.

This is significant in light of the fact that the Central government had contested the charge of "undue gain" made by CAG in its report in 2012 and by public-interest petitioners who subsequently approached the Supreme Court seeking the cancellation of all coal block allocations.

The Centre has of late showed signs of changing its stand. Last week, the attorney general GE Vahanvati admitted in the SC that "something has gone wrong and some correction is required".

On Sunday, TOI reported that the Centre was veering to the view that scrapping allocations in cases where mining leases were pending could help avert a full-scale cancellation by the court, which could give fresh ammunition to its political opponents in an election year, apart from further souring its relations with industry. That an affidavit filed by a Congress-ruled state government has asked for partial cancellation indicates the possible stand the Centre might take in the court this week.

However, the Congress might find it harder to explain why its state own government believes the Centre's allocations helped private companies make "undue gains", which according to CAG amounted to Rs 1.86 lakh crore.

In its affidavit, Maharashtra government said, "It is in the financial interest of the state government that coal blocks are auctioned in a transparent manner." It has suggested that the blocks where mining leases are pending be taken back for auctions, and in cases where companies have invested in end-use projects, the government could evolve a system of collecting premium before executing their mining lease.

A total of 198 blocks with an estimated 43 billion tonnes of coal were given out as captive coal blocks since 1993. In the court, the Centre has said mining leases are pending for 32 coal blocks allocated after 2006.

Source: The Times of India