60 coal block allottees may have benefitted by Rs 1.97 lakh cr

As the government deliberates on action to be taken in coal blocks where little work has been done so far, the Coal Ministry estimates that allottees of 60 mines may have got a whopping Rs 1.97 lakh crore benefit by getting these for free.

The 60 blocks were awarded to both private and public sector companies without competitive bidding between 1998 and 2009. Of these 60 blocks, seven were allocated during the BJP-led NDA regime between 1998 and 2004 while 53 blocks were given away during the UPA regime.

The allottees which got the blocks face punitive action for failing to meet timelines for beginning production.

The seven blocks awarded during the NDA time had a cumulative extractable reserve of 420 million tonnes and these might have accrued Rs 12,421 crore undue benefit, if the CAG methodology of calculation of undue gains made by private firms is taken into account, a coal ministry document said.

Out of these 60, 19 have been considered in the recent CAG report, which pegged a whopping Rs 1.86 lakh crore gain to private parties from allocation of 57 blocks between 2005 and 2009.

"Out of 99 coal blocks allocated to private players since 1993, 60 coal blocks with 6.7 billion tonnes valued at nearly Rs 1.97 lakh crore can be cancelled due to lack of progress as ascertained by the Coal Ministry in the meeting of January, 2012," a source said.

The meeting, chaired by Zohra Chatterji, Additional Secretary, Coal, had representations of other ministries.

"60 blocks having almost all the reserves cited by CAG (6.7 billion tonnes) can be cancelled and handed over to Coal India for development immediately as the present allocatees have not concluded land acquisition," the source said.