Coal scandal: Final report by inter-ministerial group by September 10

New Delhi:  An Inter-Ministerial Group, with an expanded mandate to review the status of 90 coal blocks allotted since 1993 to private firms, met today in New Delhi. Sources say the panel might recommend that licences for about 60 of these blocks be cancelled as the firms they were allotted to have failed to develop them. Sources say allottees of these blocks have been called-in for presenting their case. The firms stand to lose their bank guarantees, if they have not achieved the required development of the coal blocks. A final recommendation by the committee is expected to reach the Coal Secretary by September 10.
Here are 10 latest developments in this story:
  1. Of the 60 blocks for which the panel is expected to recommend cancellation of licences, 53 were allotted during the Congress-led UPA regime and seven during the pre-2004 BJP-led NDA regime. The panel cites non-progress as the reason for cancellation. Show cause notices were sent to 58 firms in April this year. The companies have been asked to defend themselves between the 6th and 8th of this month. 
  2. NDTV has accessed an internal note of the Inter-Ministerial Group, which was set up in June this year. It says that the cancellations that it recommends could defuse the current crisis. It also says that production in the 60 blocks, which it has identified for non-performance, is unlikely by March 2013. The panel is expected to recommend that if licences for the 60 blocks are cancelled, these can be handed over to the public sector undertaking, Coal India. These 60 blocks have an estimated 6.7 billion tonnes of coal reserves valued at Rs 2 lakh crore.
  3. Coal Ministry sources stress that what the panel reviews today is unrelated to the CAG coal block allocation issue. The sources have clarified that many coal blocks under review today are different from those mentioned in the national auditor's report on coal allocation that has created a political storm, with the BJP holding up Parliament proceedings for the last nine days as it demands the Prime Minister's resignation. The Comptroller and Auditor General or CAG has said that private companies had a windfall gain of about Rs 1.86 lakh crore from what it calls non-transparent allocation of 142 coal fields. The BJP points out that Prime Minister Manmohan Singh, who held charge of the coal ministry, must own moral responsibility. It also wants those licences cancelled; the government has refused to do that.
  4.  Sources say that 17 firms under review today are also mentioned in the CAG report. A draft report of the committee reportedly faults the companies for failing to develop mines and also says many of them did not apply for land clearance.
  5. Coal Minister Sriprakash Jaiswal has asked the panel for a status report by September 15. The recommendations of the inter-ministerial panel are not binding upon the Coal Ministry. But the Prime Minister's Office appears keen for action against defaulters. Two companies that could be affected, according to the documents accessed by NDTV, are Jindal Steel and Power Limited, owned by Congress parliamentarian Navin Jindal, and Usha Martin, owned by the Jhawar family. They were each assigned coal blocks in Jharkhand.
  6. On July 25 the committee recommended to the Coal Ministry that the licences of these firms be cancelled. Nearly a month later, on August 21, Coal Secretary SK Srivastava asked why a recommendation for action was being made at a time when guidelines for revoking licences have not yet been formalised. On August 23, the head of the ministerial committee, Zohra Chatterji, who is also the Additional Coal Secretary, responded that the existing terms for licences allow for cancellation if a company does not show satisfactory progress in developing mines. Ms Chatterji also pointedly said that it was upto the Coal Ministry to accept or ignore recommendations.
  7. Four days later, the Coal Secretary seemed to take a U-turn and stressed in a letter dated August 27 that the Prime Minister's Office had expressed concern over "not initiating action in the respect of de-allocation where show cause notices have been issued." He also wrote that the PMO had asked the ministry to expedite all matters on a priority basis.
  8. The Coal Secretary is unhappy that the inter-ministerial panel did not give the companies concerned an opportunity to defend themselves, sources said. Mr Srivastava raised a similar point with Ms Chatterji in similar correspondence. She responded by saying in a note that a detailed report of the companies' responses to their show cause notices has not been readied because the concerned department within the Coal Ministry is "overburdened with work related to a CBI inquiry".
  9. However, officials from the concerned companies said this is not a valid reason for recommending de-allocation. They said they had replied to the show cause notice that was sent to them in April by the government but their answers had not been taken into account by the committee that had recommended the cancellation of licences.
  10. The Opposition BJP has faulted the government for a coal policy that was not in the best interests of the country. It is the last week of the Monsoon Session; for the last nine days the BJP has made it impossible for Parliament to transact any business as it demands the PM's resignation. On Friday, the PM said there was no question of him quitting. He accused the BJP of violating democratic processes by not allowing Parliament to function.

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