Coal ministry seeks CCEA views on cancellation of 61 mining licences

The coal ministry has sought advice from the Cabinet Committee on Economic Affairs on the fate of the 61 coal blocks awarded to private companies for captive use even as the CBI in its status report filed in the Supreme Court said in it had found no ''criminality'' in allocations of 50 coal blocks.

''The cabinet reviewed mining progress in about 61 blocks. We would need to review possibility of cancellation of mining licences,'' a senior government official.

Of the 61 blocks, nearly 29 were awarded in the pre-advertisement phase, while the remaining were allocated post advertisement. Moreover, more than 25 of these blocks are yet to get first stage of clearances.

Although it may not be feasible to present the status report of all the 61 blocks, the coal ministry is against a blanket cancellation of coal blocks, as it would hamper investments in the sector.

The coal ministry has also sought views of the law ministry. Attorney General GE Vahanvati is expected to reply to the Supreme Court on de-allocation of mines, on Wednesday. As of now, no single department wants to take independent stance, sources close to the developments said.

The cabinet committee on economic affairs met on Monday to discuss the next step with regard to cancelling coal block allocation. ''Coal blocks allocation matter is sub judice. AG will update the Supreme Court on the decision of the government,'' union minister for information and broadcasting Manish Tewari said after the meeting.

Last week, the attorney general had indicated that the government may opt to cancel allocations that have not been 'converted into mining licences.'

The CBI's status report filed in the Supreme Court on Monday said it has not found any ''criminality'' in allocations of 50 coal blocks. The Supreme Court might go through it on 15 January when a bench headed by Justice RM Lodha will hear a bunch of PILs on the coal blocks allocation scam.

Although the agency has analysed the records in detail and concluded that there was no criminality involved in the allocation of these coal blocks, a final decision whether to drop them from the ongoing probe would be taken after the Supreme Court directives, sources said.

Meanwhile, industry body FICCI has sought the creation of an empowered committee by the Supreme Court to look at all cases and action be initiated against those who are found to be deficient in meeting the obligations in the contract.

''Any such en masse cancellation will severely hurt the coal block allocates who had complied with the contractual obligations as specified by the law of that day and will make their assets unviable. This may also put huge distress on the lenders and the banking sector that have funded these projects. This will have a spiralling effect on the entire economy as coal is feedstock to many of our core industries,'' said Sidharth Birla, president of FICCI.