IMG can't decide on coal block deallocation, says FinMin

Sees administrative ministry as best suited to take a call

In what could be seen as muddying the Coalgate waters more, the finance ministry has told the inter-ministerial group (IMG) on coal that it cannot decide, or even recommend, deallocation of coal blocks, as it was not privy to all pre-allocation facts. This is in contrast with the government’s earlier stand that IMG would take a final call on recommendations regarding coal block deallocations.

According to TV reports, Prabodh Saxena, a joint secretary in the finance ministry, on September 5 wrote a letter to IMG, headed by Zohra Chatterjee, additional secretary in the coal ministry, saying a decision on deallocation should be left to the administrative ministry, which had the details of allottee companies.

A Times Now report said the letter warned of the possibility of international arbitration if IMG went ahead and recommended cancellation of coal contracts.

Saxena, who is in Japan for an official visit, could not be reached for comment.

Rebutting reports of any change in the government’s stance vis-à-vis IMG, another finance ministry official, who wished not to be named, said the September 5 letter from the ministry merely emphasised the need to make available all relevant documents to IMG to fulfil its mandate of recommending action on the coal blocks. The administrative ministry can take the follow-up action, which could mean taking Cabinet approval for deallocation, on its recommendations, he added.

“The letter has been misinterpreted by the media. The terms of reference of IMG said it would make recommendations. The finance ministry letter just said IMG should be provided all facts to arrive at a decision or recommendations,” said the official, denying reports of a difference of opinion between the coal and finance ministries.

Earlier in the day, Coal Minister Sriprakash Jaiswal met Finance Minister P Chidambaram to discuss the issue. Department of Economic Affairs Secretary Arvind Mayaram and Coal Secretary S K Srivastava were also present at the meeting where directions were issued to IMG to finalise its recommendations at the earliest.

“(I am) hopeful of receiving IMG’s first report on coal blocks by September 15,” Jaiswal told reporters after the meeting.

However, officials said the September 15 deadline could be missed, as IMG was expected to meet again.

The panel had sought a status paper on each block allocation from the coal controller, but had so far reviewed the progress of only 29 blocks held by private companies. Unhappy with the delay by the coal ministry in taking action against the 58 allottees to whom showcause notices had been issued, the Prime Minister’s Office had directed expediting the process of review.