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| All Coal Licenses Issued Since 1993 |
| All Coal Licenses Issued Since 1993 Are Illegal, Says Supreme Court
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| INDIA
, 25-August-2014
8:43:20 AM |
| he Supreme Court today 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. (Read full judgement here)
How the mining rights should be re-assigned will be decided by the top court in a series of hearings starting September 1. The uncertainty over the coal contracts will add to investors' confusion about doing business in one of the world's fastest-growing economies.
The allocation of coal licenses has been the subject of a CBI investigation that is being monitored by the Supreme Court since 2012 when the state auditor said that 1.83 lakh crores had been lost because coal rights were not auctioned. They were instead assigned by a government committee. The CBI is looking at possible collusion by officials to give blocks at low prices to companies, some of which never developed them.
The finding of the Comptroller and Auditor General forms the basis of the scandal dubbed "Coal-Gate" which singed the previous government headed by Dr Manmohan Singh, who held direct charge of the Coal Ministry for some of the years under investigation. Dr Singh ignored calls for his resignation over the alleged scam, which added to a retinue of financial scandals weighing down his government ahead of the national election in May.
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).
India is the world's third-largest coal producer after China and the United States, but output has struggled to keep up with consumer demand for electricity. The government handed out the coalfields for a nominal cost to operators who promised to use the coal for their own power, steel and cement projects.
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