INDIAN COAL ALLOCATION SCAM
CHITKARA BUSINESS SCHOOL
Submitted To: Submitted By:
Ms. Priya Jindal Taniya
(Assistant professor) 1820993116
CHITKARA BUSINESS SCHOOL
TABLE OF CONTENTS
INTRODUCTION AND THE BASIC ISSUE
Its been since 1993 to 2010, a number of coal blocks were identified which were not added in the production of coal India ltd and Singareni collieries company ltd.
Year of allocation Government Companies Private Companies Power Projects Total
No. of blocks GR (in MT) No.
of blocks GR (in MT) No. of blocks GR (in MT) No. of blocks GR (in MT)
Up to 2005 29 6,294.72 41 3,336.88 0 0 70 9,631.6
2006 32 12,363.15 15 3,793.14 6 1,635.24 53 17,791.53
2007 34 8,779.08 17 2,111.14 1 972 52 11,862.22
2008 3 509.99 20 2,939.53 1 100 24 3,549.52
2009 1 337 12 5,216.53 3 1,339.02 16 6,892.55
2010 0 0 0 0 1 800 1 800
Total 99 28,283.94 105 17,397.22 12 4,846.26 216 50,527.42
A list was prepared of total 216 blocks which were allocated, but some were taken away at different points. At last, allocated blocks only stood at 194.
In March 2012, a draft report of CAG accused the government of inefficient allocation of coal blocks among 2004 and 2009 and envisioned the windfall profits to allottees at Rs.10.7 lakh crore.
BACKGROUND TO COALGATE: HISTORY OF COAL ALLOCATION IN INDIA
FIRMS ELIGIBLE FOR COAL ALLOCATION:
With the centralised method, between 1972 and 1976 , India nationalised its coal mining industry with the state owned businesses Coal India confined (CIL) and singareni collieries corporation (SSCL) being liable for coal manufacturing.
This process culminated in the enactment of the coal mines (nationalism) Amendment Act 1976, which terminated coal mining leases with private leases holder. Even after this, Parliament recognised that the national coal organizations were not able to completely meet demand and supplied for exceptions, allowing positive companies to hold coal rentals:
1976 captive mines owned with the aid of iron and metallic organizations
1993 Captive mines owned via strength technology companies.
2007 Captive mines for coal gasification and liquid faction.
THE COAL ALLOCATION PROCESS
In July 1992, the ministry of coal, issued the commands for constitution of the screening committee for the screening notion received for captive mining via personal power generation groups.
The committee changed into composed of government officers from the ministry of coal, the ministry of railways, and the relevant nation authorities.
A range of coal blocks which have been now not inside the manufacturing plan of CIL and SSCL have been recognized in session with CIL/SSCL and a listing of 143 coal blocks have been prepared and located at the website of the MoC for facts of public at massive.
Companies could apply for an allocation from amongst those blocks. If they have been a hit, they could acquire the geographical document that have been organized through government, and the handiest payment required from the allocate was to reimburse the authorities for their prices in making ready the geographical record.
RESULTS OF COAL ALLOCATION PROGRAM
Giving the inherent subjectivity in a number of the allocation pointers, as well as the capability conflicts between guidelines it is unsurprising that in reviewing the allocation method from 1993 to 2005, the CAG says that, There turned into no actually spelt out standards for the allocation of coal mines.
2005: the professional committee on coal area reforms supplied guidelines on improving the allocation technique.
2010: the mines and minerals Act, 1957 Amendment Bill became enacted, supplying for coal blocks to be bought thru a device of aggressive bidding.
The foregoing helps the following conclusion:
The allocation method prior to 2010 allowed some corporations to attain treasured coal blocks at a everyday expense.
The eligible firms took up this opinion and acquired manipulate of good sized amounts of coals within the length 2005-09
The criteria hired for awarding coal allocations had been opaque and in a few respects subjective.
ALLEGATIONS MADE AGAINST:
In September 2012, several information reviews alleged that family of S. Jagathrakshakan, Minister of State for Information and Broadcasting in the UPA authorities is part of an employer named JR Power Gen Pvt. Ltd. Which changed into presented a coal block in Odisha in 2007.
It became the identical enterprise which fashioned a joint mission with a public area corporation, Puducherry Industrial Promotion Development and Investment Corporation, on January17, 2007. Barely five days after, PIPDIC was allocated a coal block.
According to the MoU, JR Power loved a stake in the allotment, However, JR Power had no expertise in thermal power, iron electricity and steel or cement. The key sectors for intake of coal. Later, in installed player with hobbies in strength zone.
In this manner, the rights for using coal block ultimately passed directly to KSK.
Ajay Sanchetis SMS Infrastructure Ltd. Was allegedly allocated coal blocks in Chhattisgarh at low costs. He is a BJP Rajya Sabha MP and is assumed to be in close relation with Nitin Gadkari.
According to the CAG, the allocation of the coal block to SMS Infrastructure Ltd. Has brought on a lack of Rs. 1000 crore.
UPA Partner Rashtriya Janata Dals chief Premchand Guptas sons organization, new within the metal business implemented for a coal block when Premchand Gupta was the union minister for corporate affairs and bagged it approximately a month after his tenure ended along with that of his government.
The business enterprise in query is IST Steel and Power an associate company of the IST group, which is owned and run via Premchand Guptas two sons Mayur and Gaurav. IST Steel, together with cement majors Gujarat Ambuja and Lafarge, was allotted the Dahegaon IV block in Maharashtra.
The organization, which carried out for a block on January 12, 2007, and become awarded it on June 17, 2009, is a sitting on reserves of 70.Seventy four million tonnes. The reserves it controls are extra than the combined reserves held by a whole lot large businesses Gujarat Ambuja and Lafarge.
Mr. Gupta continues he had no involvement in IST Steel and denies influencing the coal block allocation process.
Jindal Steel and Power Ltd. Go a coal area in February 2009 with reserves of 1500 million metric tonnes at the same time as the authorities run Navratna Coal India Ltd. Was refused.
On February 27, 2009, personal agencies got big coal blocks. Both the blocks have been in Odisha whilst one became over 300 mega tonnes, the opposite become over 1500 mega metric tonnes. Combined worth of these blocks become properly over R. 2 lakh crore and these blocks were intended for the liquefication of coal.
One of these blocks become offered to Jindal Steel and Power Ltd, which become allocated the Talcher coal field in Angul in Odisha in 2009, nicely after the self-imposed reduce-off date by means of the Centre on allocation of coal blocks.
The competition alleged that the authorities violated all norms to present him coal fields. Naveen Jindal, however, denied any wrongdoing.
On 15 September 2012, a global ministerial institution (IMG) headed through Zohra chatterji advocated cancellation of a block allotted to JSW, a Jindal group organisation.
Naveen Jindals organisation has filed an FIR towards Zee Business Channel for allegedly disturbing Rs.50 crore for no longer doing an information tale on coal rip-off.
As in line with the FIR, the HR head of the Jindal Company has alleged the sudhir Chaudhary and Sameer Ahluwalia met officers of the Jindal institution and told them that they had testimonies against them which will be dropped if a sure amount of cash changed into paid.
The officers alleged that when the business enterprise refused to pay, the channel ran a chain of malicious information objects focused on the Jindals.
MARCH 2012- COALGATE EXPLODES: THE DRAFT REPORT
The CAG report is a performance audit focusing at the allocation of coal blocks and the allocation of coal India in the 2005-09 period. The draft record stretching to a hundred and ten pages- some distance more certain and containing extra explosive allegations than the toned down final file of some 50 pages became the report that sparked the Coalgate furore. The draft file covers the subsequent topics:
Overview (pp. 1-2)
Audit framework (pp. 3-4)
Institutional framework (pp. 5-10)
Gaps in deliver and call for (pp. 11-17)
Coal blocks-allocation and production overall performance (pp. 18-55)
Production performance of CIL (pp. 56-83)
Conclusions and hints (pp. 84-88)
Annexure (pp. 89-110)
On 31 can also 2012, significant vigilance commission (CVC) based totally at the complaint to two BJP Member of Parliament Prakash Javadekar and Hans raj Ahir directed a CBI enquiry.
There had been leaks of the document in media in March 2012 which claimed the parent to be around 1060000 crore. It is referred to as through the media as the Mother of the all scams.
Discussions about the issue changed into placed inside the parliament on 26 august 2012 by means of the high minister Manmohan Singh with huge protests from the competition.
According to the comptroller and auditor well known of India that is a leak of initial draft and the info being introduced out had been observations which had been under discussions at a totally preliminary age.
On 29 may also 2012, high minister offered to give up his public lifestyles if determined responsible on this scam.
FORMATION OF INTER-MINISTRIAL GROUP
In June 2012, the coal ministry panel together make an inter-ministerial panel to review the manner of allocation of coal blocks or forfeiture of financial institution ensures.
Zohra chatterji, extra secretary, coal ministry become named as chairman of the IMG. Other IMG members consist of representatives from energy, metallic, department of monetary affairs, industrial coverage and promotions and law and justice.
Significantly, the choice turned into taken after the CVC had already ordered a CBI enquiry into alleged irregularities.
THE CAG FINAL REPORT
On 17 august, the CAG submitted its very last document to parliament. Much much less detailed than the draft report, the very last record nonetheless made the same charges in opposition to the authorities.
The authorities had the authority to auction the coal blocks but selected not to.
As an end result allocates obtained a windfall advantage from the program.
The final report had the subsequent define:
Preface (pp. I-ii)
Executive summary (pp. Iii-viii)
Chapter-1: coal: a top level view (pp. 1-6)
Chapter-2: audit framework (pp. 7-8)
Chapter-three: augmentation of coal manufacturing (pp. 9-20)
Chapter-4: allocation of capital coal blocks (pp. 21-32
Chapter-five: efficient overall performance of capital coal blocks (pp. 33-42)
Chapter-6: conclusions and guidelines (pp. 43-45)
SEPTEMBER 2012: COALGATE REACHES SUPREME COURT OF INDIA
Advocate M L Sharma filed a PIL within the Supreme Court sought cancellation of all of the 194 coal block allotments. The court docket, tracking the CBI probe into the coal rip-off, requested the employer now not to disclose probe details to the government.
In April 2013, the Standing Committee on Coal and Steel in its record tabled in Parliament said that allocation of coal blocks among 1993 and 2008 become done in an unauthorised way. It also said that allotment of mines where production has now not commenced must be cancelled.
Defending a CAG, the ideally suited court bench of justice R M Lodha and A R Dave brushed off the solicitor fashionable Rohinton Narimans objections that petition is based heavily at the CAG file by using announcing, the CAG is a constitutional authority and that its record is no longer a chunk of trash.
Moreover, the court docket ordered the government to tell it reasons for not following the 2004 coverage of aggressive bidding of coal blocks allocations. The apex courtroom desired now not most effective to recognize the steps which have been taken but additionally proposed in opposition to groups which have breached the settlement.
COAL BLOCK ALLOCATION QUASHED
Then CBI director Ranjit Sinha informed the Supreme Court that the investigation record became shared with Law Minister, main to Ashwani Kumar resigning from the office.
On June eleven, 2013, CBI registered an FIR against Minister of State inside the Coal Ministry Dasari Narayana Rao and an industrialist.
Subsequently, Supreme Court decided to installation a unique CBI court docket wherein all coal block allocation cases may be attempted. On September 24, 2014, Supreme Court quashed allocation of 214 coal blocks. Thereafter, the Lok Sabha exceeded a bill paving way for clean auction of the coal blocks de-allotted by way of the court.
CHARGE SHEET AGAINST MADHU KODA
A special court ordered the CBI to study former Prime Minister Manmohan Singh, and the latter’s announcement become recorded in January 2015. Consequently, the court docket summoned the previous high minister who then moved the Supreme Court in opposition to the order. Supreme Court stayed the trial courtroom’s order summoning Manmohan Singh.
In April 2015, CBI filed a price sheet against former Jharkhand chief minister Madhu Koda, former MoS for Coal Dasari Narayan Rao and 13 others in a coal block allocation case.
Koda and nine others have been later granted bail. The CBI hostile Koda’s plea to summon Manmohan Singh as an accused in a coal mine allocation in Jharkhand.
The CBI special court docket ordered framing of expenses towards Koda and others in alleged irregularities in allocation of Rajhara North coal block in Jharkhand to Kolkata-based totally Vini Iron and Steel Udyog Ltd (VISUL).
After the unique court docket held Koda and two others responsible of dishonest and criminal conspiracy these days, the sentencing inside the case will take area the next day.