SC cancelling coal block allocations could hit power sector badly, says PC Parakh

After the apex court deemed illegal all coal block allocations made by a screening committee since 1993, former coal secretary PC Parakh said that the allotting body had no legal basis but hoped that the apex court wouldn't cancel all the coal blocks allotted.

"The screening committee had no legal basis," Parakh said in a exclusive interview with CNN-IBN.

He also said that the screening committee wasn't delegated power to take decisions.

Parakh, incidentally, was named in a CBI FIR along with industrialist Kumar Mangalam Birla in a case pertaining to the allocation of a coal block. However, the CBI confirmed that it would be filing a closure report in the case as there was no criminality found.

The Supreme Court today held that all coal block allocations made since 1993 till 2010 before pre-auction era during previous NDA and UPA regimes have been done in an illegal manner by an "ad-hoc and casual" approach "without application of mind".

The apex court said that issue of de-allocation requires further hearing and will take a decision on cancelling 218 coal block allocations on 1 September, 2014.

However, Parakh said he hoped that the court wouldn't cancel the allocations as it would have a far reaching impact on the nation's economy.

"I hope that on September 1, when the Court again hears the case, it will find some kind of a via media solution which ensures that the country's economy does not suffer...However, if all coal blocks are de-allocated wholesale it can have very serious implications for India's power sector and India's economy as a whole," he said in an exclusive interview with CNBC-TV18.

"If the allocated coal blocks are cancelled, we are at least five years behind in terms of production of coal which can have serious implications for our power sector," he said.

Updated Date: Aug 25, 2014 18:01:25 IST