No production from 64 coal blocks facing allegations of illegal sales

The coal ministry has told the Central Bureau of Investigation (CBI), probing alleged irregularities in coal block allocation, that no production had ever been reported from the 64 captive blocks that face allegation of illegal sales.

CBI is currently investigating into the allegation that coal produced from these blocks could have been illegally sold in the open market.

The investigating agency initiated the inquiry based on a reference by the Central Vigilance Commission (CVC) after the principal opposition party, Bharatiya Janata Party (BJP), complained to the anti-corruption watchdog regarding “irregularities” in allocation of blocks and “illegal sale” of the fuel.

As part of the preliminary inquiry, CBI had recently asked the coal ministry to provide production data from the 64 blocks to ascertain the allegations. The ministry had then set up 23 teams which visited the mines, according to a source close to the development.

“Based on the report of these 23 teams and use of satellite imagery, the coal ministry found none of these 64 blocks had ever come into production. The ministry has informed this to CBI two days back,” the source said. The controversy surrounding the allocations had picked up pace with BJP asserting some companies might have already sold the blocks allotted to them.

CBI started the preliminary inquiry last month.

Overall, CBI has been asked to look into three areas--first, why allocations continued between 2006 and 2009 even when a legislative change to bring about auctioning was pending; second, whether these blocks were allocated in a fair and transparent manner; and third, if there has been misuse of the coal blocks allotted to companies.

A CBI official had recently told Business Standard a formal case would be registered in the matter in case definite evidence of any violation of law was found in the inquiry in the last two allegations.

The government has allocated 203 coal blocks with cumulative reserves in excess of 50 billion tonnes. However, only 26 of these blocks have started production so far. These blocks currently produce 35 million tonnes of coal annually.