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Tuesday, 04 September 2012 00:00
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Cancelling licenses to give them to Coal India a bad idea

While the inter-ministerial group (IMG) on coal continues to deliberate over whether to ‘de-allocate’ 58 of the coal mines that were the subject of the CAG report, and the coal secretary says there will be no de-allocation till all the companies are given a decent hearing, a few points need to be kept in mind. First, the IMG would do a good job if it was to, to begin with, come up with a list of mines where those who were allotted the mines have sold off part or all of their equity, and at what price. Only once this is done can some concrete decision-making be done—right now, all we have are rumours of coal mines having changed hands and of undeserving companies having got allotments. The IMG would also do well to come out with a list of mines where, according to it, those allotted the mines were either undeserving or furnished incorrect information while getting the mine.

Once this is done, we need to have some clarity on why the coal ministry, till now, did not even have guidelines on how to deal with mine allottees who were squatting on the mines instead of developing them—indeed, though the period in which the mines should have come on stream is already over in several cases, the coal ministry has not even bothered to encash any of the bank guarantees. Though the reasons for the coal secretary’s reported opposition to the IMG’s proceedings are not clear, he has admitted there were no such guidelines while criticising the IMG for wanting to cancel allotments in the absence of such guidelines. The tension between the IMG and the coal ministry, of course, is best brought out by the IMG head, additional secretary Zohra Chatterji in the coal ministry, saying the coal ministry has not shared all information with the IMG.

Whatever the decision that is finally taken, giving back the de-allocated mines to Coal India Limited (CIL) is a bad idea. The reason why the captive mines were given out in the first place was because CIL proved singularly incapable of hiking production. It is equally true captive miners haven’t done a great job either so far. Since both the BJP and the Congress claim they are in favour of revoking the public sector monopoly in coal mining, getting in commercial miners has to be a top policy priority. So far, however, most user-industries like power and steel have opposed the entry of commercial miners.


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