Coal blocks allocation: Govt not pressing SC on select cancellations

The SC has termed all coal block allocations through the screening committee and the government dispensation routes illegal under the Coal Mines Nationalisation Act

In an affidavit to the Supreme Court, the government has said it isn't pressing the apex court "to not cancel selected coal blocks". On Tuesday, the court is scheduled to hear a case on coal block allocations between 1993 and 2010.

Last week, the government had urged the court to consider exempting 46 blocks from de-allocation. Citing India's dismal power situation, the Centre has sought a speedy court verdict in this regard, a move that has left companies such as Jindal Power, Hindalco and GVK, which have blocks in the list of 46, without its backing.

"The Union of India has no objection to the cancellation of allocations declared illegal by this court....there are 40 coal-producing blocks, along with their linked end-use plants and six coal blocks that are ready to produce coal. The aforesaid was only by way of information and the central government was not insisting on any particular course of action," the Centre said in the affidavit.

The Supreme Court has termed all coal block allocations carried out through the screening committee and the government dispensation routes illegal under the Coal Mines Nationalisation Act. This has cast a shadow on the government's plan to open the coal sector to commercial mining. "We are not opening up for the private sector right away. Our first priority is the regulated sector,' Piyush Goyal, coal, power and renewable energy minister, had said at a press conference on Sunday.

Officials in the coal ministry said the government wanted to refrain from suggesting any specific course of action to the apex court.

The Centre has requested the Supreme Court to consider levying an additional charge of Rs 295 a tonne on the 46 operational blocks. "In case of allocatees in the power sector, it should be mandated that they enter into power purchase agreements with state utilities/distribution companies so that the benefit is passed on to consumers," said the government's affidavit.

Coal linkages with state government-owned companies have also hit a wall. About 18,000 Mw of thermal power capacity is awaiting coal supply since 2007. Most of these units are stuck due to regulatory hurdles and limited supply with Coal India and its subsidiaries.

According to a September 4 report, by the standing committee on coal linkage, 24 power units across the country are deemed fit to have coal linkage with Coal India and its subsidiaries. Of these, the linkage period for 15 (with a combined capacity of about 9,000 Mw) has lapsed. For the remaining units, regulations related to the environment ministry had led to delay.

At a meeting in June last year, the Cabinet Committee on Economic Affairs had directed the government to expedite fuel supply to these power units. However, these companies have said there has been no development on this front in the past year.

"We were looking forward to this progressive move, but no notice for signing fuel-supply agreements has been seen in the past year. Also, we haven't received renewed supplies," said an executive of one of these companies.

Govt seeks clarity on 'title of land'
In an affidavit, the Centre has asked the Supreme Court to provide clarity on 'title of land'. It said if the court cancelled coal blocks, the title of land would remain with the allocatee. "In the event of subsequent grant of the coal block, it might not be possible for the grantee to secure the title of the land from the previous owner," the government said. It has, therefore, suggested the court re-convey the land to the Centre or its nominees.