New Delhi: The Supreme Court yesterday cancelled all the coal blocks allocated from 1993 to 2011, except four vested with the NTPC and other public sector undertakings.
As a consequence, 214 coal blocks stand cancelled.
However, an apex court bench, headed by Chief Justice R M Lodha, in its order said that 42 coal blocks under production or about to commence production will remain with their present managements for the next six months till the centre decides on their reallocation.
The court said that the management of these 42 coal blocks will have to pay a royalty of Rs295 per tonne of extracted coal during the six months.
India could face power disruptions even as Rs4 trillion ($66bn) worth of investments hang in balance with the Supreme Court order, stakeholders said.
They, however, hope the verdict will end uncertainties in the economy and the government will put in place a prudent policy environment to usher in transparency in the system.
Calling for a quick review of the coal blocks allotment policy, industry body FICCI President Sidharth Birla expressed the hope that the verdict would pave the way for full-fledged coal reforms starting with amendment in Coal Mines Nationalization Act, 1973 and Mine Minerals (Development and Regulation) Act, 1957 to facilitate entry of the private sector in coal exploration and mining.
State Bank of India chairperson, Arundhati Bhattacharya said the bank looks forward to a “swift and transparent” bidding process of the coal blocks cancelled by the Supreme Court.
“We believe that uncertainty is possibly the worst enemy of growth. We are glad that this is over with the SC verdict on coal blocks allocation,” Bhattacharya said in a statement.
“We now look forward for a quick plan of action for ensuring that coal supplies are not disrupted and thereafter a swift and transparent bidding process for reallocation,” the SBI chairperson added.
The court has also said that companies that have been mining coal have to pay for all the coal that they have mined or used until March 31, 2015.
Jayaswal Neco, one of the firms affected by the judgement, said the company had long mined the coal from the mine allocated to it and had already passed on the benefits to the consumers.
Giving an estimate of the economic impact of the deallocations, Naveen Jindal, Chairman of another affected company Jindal Steel and Power (JSPL) said earlier this month that about Rs400,000 crore of investment made to develop coal mines would be in jeopardy if the blocks were to be de-allocated.
“If we term the government’s coal allocation policy as faulty and illegal, then the effort put in by the investors to revive the discarded mines of Coal India, the entire Rs4 lakh crore investment would be in jeopardy,” Jindal had said.
IANS
