Screening Committee for coal blocks has no legal basis: Parakh

However, he said SC's decision to cancel all allocations from 1993-2010 will have serious ramification on the economy

Former coal secretary P C Parakh today said the screening committee for allocation of coal blocks has no legal basis, but if the Supreme Court decides to cancel all blocks allocated from 1993-2010 it will have a "serious" ramification for the economy.

Parakh, who headed one such committee, said he had earlier flagged the issue with the suggestion of an amendment to the Coal Mine Nationalisation Act to bring in a fair and transparent bidding process.

In July 1992, the Coal Ministry had ordered setting up of a screening committee to consider proposals from private power companies for captive mining on first-cum-first-serve basis. Screening committee guidelines give preference to large projects of power and steel companies.

In all, 216 block were allocated between 1993 and 2010, out of which 24 were taken away at different points in time, leaving the total number of allocated blocks at 194.

The Supreme Court today said all coal block allocations from 1993 till 2010 before pre-auction era have been done in illegal manner and it suffered from "vice of arbitrariness" besides viewing that coal block allocation done by screening committee was not fair and transparent.

Parakh said: "I was expecting that Court will declare them to be illegal. From the beginning, I have also taken a view that screening committee has no legal basis and therefore, I had in 2004 itself, said that we must bring an amendment to the Coal Mine Nationalisation Act to bring in bidding system.

"That would have been the appropriate, legal system. The proposal was approved by the Prime Minister. However, for eight long years, it could not be implemented. The view that the court has taken today that screening committee has no legal basis, I think, is the right view."

He added however that cancelling all these allocations will have serious ramification on the Indian economy, its coal and power industries.

There is a need to set the procedure right for coal block allocation, Parakh said, adding that in its absence, India might end up importing more coal to its already existing big basket which would have a serious implication for the economy.