Parliament Standing Committee terms coal allocations as "non-transparent, illegal and unauthorized"

The Parliamentary panel which has looked into coal mine allocations done in 1993 to 2010 termed the it as “unauthorised and illegal” and also suggested scrapping of mines that have not yet started production.

The Standing Committee on Coal and Steel in its report tabled in Parliament said the mines were allocated in “most non-transparent” manner and natural resources were distributed to “few fortunates” through “abuse of power” by the then ruling dispensation.

“Distribution of mines was done in a most unauthorised manner,” said the panel Chairman Trinamool Congress MP Kalyan Banerjee seeking scrapping of mines where production is yet to start besides investigating role of officials involved in the allotment process.

The Panel chairman Trinamool Congress MP Kalyan Banerjee said, "The distribution of mines from 1993 to 2010 was done in a most unauthorised manner and non-transparent procedure for allocation and supply of coal blocks. 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.”

He also noted that the allocations were amounted huge loss to the state exchequer. However, on the amount of losses Mr. 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.”

Important points in the report:

• For allocating coal blocks neither any auction was held nor the Central Government earned any revenue.

• 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.

• 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 found 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 stressed the need for introducing a proper mechanism for correct evaluation.

• Coal production has commenced only from 30 coal blocks out of total allocated 218, especially private companies which have a major share in allocation.

Terming no auction as unfortunate, it said the entire decision—making process for distribution of coal blocks needs investigation and that necessary penal steps should be taken against everyone who was directly or indirectly a party to such a decision—making process.

“Since Committee have come to conclusion that entire procedure for distribution of coal was unauthorised, no one should enjoy the benefit of illegal auctions and therefore, all coal blocks allocated, at least where coal production has not yet started, should be cancelled immediately. The entire decision making process of allocations needs to be investigated and necessary penal steps must be initiated against everyone who are responsible directly or indirectly,” it said.