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PM faces queries on coal
NAVTAN KUMAR  New Delhi | 27th Nov 2011

A labourer lays coal balls out to dry at a factory in Kolkata. REUTERS

uestions are being raised on the way coal blocks were allotted between 2006 and 2009, when Prime Minister Manmohan Singh was heading the coal ministry.

During this period, 24 coal blocks were allotted every year, which was substantially higher than the usual 3-4 blocks allotted annually before 2006.

Prime Minister Dr Manmohan Singh took charge of the coal ministry after Jharkhand Mukti Morcha (JMM) supremo Shibu Soren resigned from the post in February 2006. The portfolio was later given to Sriprakash Jaiswal in independent charges in 2009.

The Centre had introduced the Mines and Minerals Amendment Bill in 2006, which proposed auction in place of free allotment on first-cum-first-served-user basis. This was done to bring about transparency in the system of allotment of coal block.

Immediately after the bill was introduced, there was a mad rush by the companies for allotment of coal blocks. The government, instead of waiting for the successful passage of the bill, allotted the coal blocks to private companies.

By the time the bill was cleared by Parliament in 2010, the government had allotted 73 coal blocks to 142 private companies. The blocks that have been auctioned between 2006 and 2009 have an estimated reserve of 17 billion tones and are valued at Rs 50 lakh crore.

According to a source, most of the companies which were allotted coal blocks did not qualify for it. "They were into some other business. But in order to qualify "on paper", they informed the government that they were "going to set up" cement, steel and power plant. This way they got the allotment," he said.

"Instead of making allotments, the government should have waited till the successful passage of the bill. But that did not happen.

The bill was finally passed in 2010. But, in these four years, 73 coal blocks were allotted to 142 private companies. What was the hurry? Coal is something which is not perishable. Moreover, in any case, there is government-owned Coal India Limited (CIL), which could have extracted the coal," he said.

BJP MP from Maharashtra Hansraj Ahir said that there should be an investigation into a possible scam in the allotments.

"In order to benefit the companies, the government in fact changed the meaning of "captive capacity" to suit them, without being the current users of coal," he said.

Earlier, as per rules, coal blocks were allotted to companies which were into cement, steel and power manufacturing. But in 2006, this rule was relaxed for "intended users", who might not be having any manufacturing facilities in these sectors, but had "plans" to venture into them.

"So, it is clear that the rules were bent, definitions were changed and modalities were distorted to benefit the private companies. Illegal gratification was obtained in the process," he said. According to him, there are reports of many companies selling these coal blocks to other companies at a much cheaper price.

Ahir said that he plans to raise the issue in a big way to draw the attention of the government.

"This is like 2G scam wherein rules were bent to benefit the private companies," he said.

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