More than a year after the Comptroller & Auditor General (CAG) tabled the coal block allocation report in the Parliament– which indicted the government for an estimated loss of Rs 1,86,000 crore while allocating coal blocks–the Central Bureau of Investigation is expected to file more first information reports (FIRs) against private sector companies.
It has already filed 14 FIRs till now and plans to file chargesheet against some companies soon.
Tata Steel, Tata Sponge and Tata Power feature among the 57 private sector companies that have benefitted from the government’s colossal loss, as per the CAG.
Tata Steel has been allotted two semi coking coal blocks–Kotre Basantpur and Panchmo–in Jharkhand, having combined reserves of 250 million tonne. The Ganeshpur thermal coal block, linked to a power project, with reserves of around 137 million tonne in Jharkhand was allotted jointly to Tata Steel and Adhunik Thermal Energy.
While Kotre Basantpur and Panchmo were allotted on August 11, 2005, Ganeshpur was allotted on May 28, 2009. But years after the allotment, the blocks are still non-producing, primarily due to want of clearances.
Tata Steel did not respond to questions put forward by Business Standard, but the company’s managing director, H M Nerurkar, had said last year that there was no scam in coal allocation.
“There was a policy and people have followed the policy. Coal is just a pass-through. If coal prices increase, it would be reflected in power rates. What is the scam? Lots of figures are coming up, but there are many issues like lease issue and mine and environment clearances,” Nerurkar had said last August.
Tata Steel officials had said in earlier interactions that the public hearing for the Ganeshpur block was over, but some of procedures were still pending, before the block was handed over to the companies. On the other hand, the legal formalities for the Kotre Basantpur and Panchmo had been processed by the state government and the central government’s nod was awaited. The lease for these two blocks, linked to Tata Steel’s brownfield expansion at Jamshedpur, were originally with Coal India and the transfer took some time, as well. That’s Tata Steel’s version.
But on November 4, 2010, the coal ministry sent a showcause notice to Tata Steel over an inordinate delay in developing the Kotre Basantpur and Panchmo blocks. The coal ministry ‘s letter to Tata Steel said that in the review meeting held on June 22 and 23, 2009, the company had assured production in December 2011.
“However in the review meeting held on 20/21 July 2010, it was noticed that no serious efforts have been made by the company to develop the coal block, even after repeated assurances tendered by the company during the period,” the letter read. The company was asked to respond in 30 days time, failing which the ministry had said, it could face deallocation.
Tata Sponge, in which Tata Steel has a majority stake, has already drawn the flak for not meeting milestones. Its bank guarantee in respect of Radhikapur (East) jointly allocated to Tata Sponge, Scaw Industries and SPS Sponge Iron, was recommended for deduction last year.
The inter-ministerial group deliberated on the presentation made by the companies and decided against deallocation of the block, but felt that the bank guarantee could be deducted due to shortfall in production.
Another Tata group company, whose name is doing the rounds for not meeting milestones, is Tata Power. Tata Power has a joint block with Hindalco Power Ltd in Jharkhand, which was allocated on August 1, 2007. The block has reserves of 189.823 million tonne and is non-producing, according to the CAG report.
Tata Power shares another block with Monnet Ispat & Energy and Jindal Photo, which is also non-producing. The block was allocated on January 9, 2008 and has reserves of 322 million tonne.
||Gross reserves (million tonnes)
||Date of allotment
|Tata Steel & Adhunik Thermal Energy
|Monnet Ispat & Energy, Tata Power and Jindal Photo
|Hindalco & Tata Power
|Tata Sponge & Others
|Source: Performance audit of allocation of coal blocks and augmentation of coal production
Source : http://www.business-standard.com/article/companies/the-great-indian-coal-scam-i-coal-controversy-looms-large-on-tata-group-companies-113103000223_1.html