Coalgate: Centre to apprise SC on financial fallout

Coalgate: Centre to apprise SC on financial fallout

With the Supreme Court set to decide the fate of coal blocks allotted between 1993 and 2010 on September 1, the Centre will appraise the apex court on the negative impact on economy if it went in for mass cancellation of block allotments. 

"The government will explain the negative impact of the cancellation of allotted coal blocks where the companies have made huge investments since the allotments,” a Coal Ministry official said.

“Deallocation of coal blocks allotted since 1993 is not possible as several firms which have got the blocks must have excavated fossil fuel and produced power,” the official added.


Though both the government and companies were expecting the final decision of the Supreme Court to bring in clarity on allocation of all natural resources, the Centre is still apprehending that any cancellation of coal blocks allotted since 1993 will have a negative impact on supplies, which would negatively affect the performance of coal-based industries such as power.

Any cancellation would also lead to over Rs 2 lakh crore in investments being put in jeopardy and several banks being in trouble as they have given huge loans to these companies. "The government will explain all these things before the court,” the official said.  


This policy will replace the existing system of allotting coal blocks based on the recommendations of an officers panel called the 'screening committee’.

Bids to be invited

As per the proposed policy aimed at making allocations more transparent, the Centre will invite bidding for coal blocks, which have got clearances from the Forests and Environment Ministry.

Under the new regime, successful bidders will get two years to explore and five years to develop the mines.

The proposal rules stipulate that successful bidders will disclose a schedule, making payments linked to volumes extracted from the mines.

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