House panel for cancelling allotments of idle coal blocks

Says non-transparent procedures adopted; blames govt for 'total abuse of power'

A parliamentary panel has called for cancelling allotments of all coal blocks awarded to companies where production was yet to commence.

The Standing Committee on Coal and Steel called all allocations done between 1993 and 2010 “unauthorised and illegal” and recommended action against the parties involved, in its report tabled in the Lok Sabha on Tuesday.

“Most non-transparent procedures were adopted from 1993 to 2010 for allocation and supply of coal blocks. The natural resources and state largesse were distributed to a few fortunates for their own benefit, without following any transparent system and amounted to huge losses for the exchequer,” the committee said, blaming the government for “total abuse of power”.

While the committee suggested scrapping allocations, Trinamool Congress Member of Parliament Kalyan Banerjee, who is heading the panel, said, “In cases where power generation has started, why should we disrupt it?” He also said the coal ministry did not share informationwith the panel on the quantity and value of coal allocated.

The panel also said it was surprised to note the coal ministry did not maintain any data on applications for blocks until 2004, even as 44.2 billion tonnes of reserves were allotted. “The entire decision-making process for distribution of blocks needs investigation and necessary penal steps should be taken against everyone who was directly or indirectly a party to such a decision-making process,” the committee said in the report.

The panel also noted only 30 of the 195 blocks allotted by the government had come into production and sought a list of companies to which blocks were allotted without end-use projects. It said the small number of operational blocks puts a question mark on the performance and efficiency of allocatee companies, especially private companies, which have a major share in allocation.

The report comes on the back of a similar report on coal block allocation by the Comptroller and Auditor General of India (CAG) last year where the auditor had observed that the government might have extended undue benefits totaling Rs 1.86 lakh crore to companies by not following bidding as a method of allocation of coal. The CAG report had led to major protests.

This time, too, upping the ante against the government on the issue, opposition parties on Tuesday demanded Prime Minister Manmohan Singh’s resignation.