Supreme Court Declares Coal Block Allocations Post 1993 Illegal
DSIJ Intelligence / 25 Aug 2014
The Supreme Court declared that all coal mining rights distributed between 1993 and 2010 were assigned illegally by the government in a process that lacked transparency in the absence of a competitive bidding system.
The Supreme Court declared that all coal mining rights distributed between 1993 and 2010 were assigned illegally by the government in a process that lacked transparency in the absence of a competitive bidding system. The court did not pass any consequential order nor cancel allocations but those issues will be considered on September 1, 2014 for how the mining rights should be re-assigned.
In regard to the allegation that the government has allowed diversion of coal from ultra mega power projects(UMPP) for commercial exploitation, the court directed that the coal blocks allocated for UMPPs would be used only for those projects and no diversion of coal for commercial exploitation would be permitted.
The CBI has post-mortemed the assignment of 194 coal blocks allocations since 1992. Of these, 39 were assigned to companies before Dr Singh's coalition government first took office in 2004 (it won a second term in 2009). The CBI has alleged that mining licences were given arbitrarily to private companies close to the ruling party for several years, without a transparent bidding process. The coal blocks allocated are in Jharkhand, Chhattisgarh, Maharashtra, West Bengal, Odisha and Madhya Pradesh. These were allotted to private companies between 2004 to March 2011.
The metal companies that are banking on captive coal blocks for their business operations, including power generation, will be the most troubled as fallout of this verdict such as Tata Steel, JSPL, Hindalco, NTPC, etc.
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