Hindalco FIR fallout: Odisha halts 29 coal block allocations

Odisha has decided to halt the process of allocating coal blocks in the state given the controversy this has generated in the past, a senior official of the state’s steel and mines department said on Monday.

The central government allocated about 30 coal blocks in the state during 1993-2012 to different companies. Some of them are either facing litigation or are facing probes by different agencies including the Central Bureau of Investigation (CBI).

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The official said only one coal block, namely Talabira-I, granted to Hindalco Industries Ltd is now in operation. The remaining 29 blocks are at different stages of processing for grant or execution.

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Some of the coal blocks allocations are now the subject of public suits before the apex court, the official said.

The apex court directed the state government to submit its response on various issues related to such allocations two months ago. Similarly, the CBI also initiated enquiry into some of these past allocations, the official said.

The central government had asked the state to proceed with steps in development of coal blocks as well as execution of mining leases as per law, he said.

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But the recent developments in Talabira-II coal block indicate that the state government is not fully aware of the developments on the pending investigations into the coal block allocations, he added.

The subsequent actions by the state government while investigations are pending are also liable to come under scrutiny, he said.

Therefore, the state government has decided not to proceed further grant of mineral concession for coal blocks in the state until pending litigation are settled or investigation is closed, he said.

“So far, we have not received any advisory or information concerning investigations into the coal blocks allocated in the state, leaving us unsure of further steps to be taken in pursuance of allocation,” the Chief Secretary J.K. Mohapatra said in a letter he has sent to the secretary of the ministry of coal last month.

“Therefore, in view of the pending litigations and investigation by the CBI or other agencies, we consider that proceeding further in respect of such allocations may not be advisable till the settlement of pending litigation or closure of investigation,” Mr. Mohapatra wrote in the letter a copy of which is in possession of IANS.

According to a report in the Economic Times today, the move by the Odisha government is likely to hit projects worth a trillion rupees in various sectors such as steel, aluminium and power. The companies that will get affected include ArcelorMittal, Tata Power, Reliance Energy, Lanco Group, Jindal Group firms, GMR Energy, Sterlite Energy, Bhushan Steel and state-owned Nalco, the report said.

The freezing of coal block allocations comes after the prime minister’s defence of the government’s decision to reallocate Talbira-II coal block to Hindalco in 2005. The reallocation became controversial after the Central Bureau of Investigation recently filed an FIR alleging malpractice in the process and naming industrialist Kumar Mangalam Birla and former coal secretary PC Parekh. However, the FIR did not name Prime Minister Manmohan Sigh, who was holding the coal portfolio when the reallocation was done. Defending his Talbira decision, the prime minister had said the reallocation was done because the Odisha government led by Naveen Patnaik had backed Hindalco.

The latest move by the state government seems to be a retaliation to this statement by the prime minister. As per the ET report, the state government has charged that the central government did not keep it in loop about the CBI investigation into coal block allocation. Union coal ministry officials, however, have said that they themselves were unaware of such a move by the CBI.

In the days ahead, the war of words between the state and central governments is only likely to intensify because Odish’a decision comes at a time when the United Progressive Alliance is desperately trying to kickstart the investment cycle in a wobbly economy.

With inputs from IANS