yesterday, shortly after 2 pm, the supreme court deallocated almost all captive coalblocks — sparing just the umpps and two JV-less blocks of sail and ntpc. with that, i guess, ends my reporting on the captive coal block allocations. see these two links. one, this bouncy little primer written yesterday on what coalgate was all about. also see this: a link aggregating all the stories by my friends (and ex-colleagues) avinash singh, john samuel raja, supriya sharma and me on the captive coalblock allocations.
Earlier this month, companies with operating captive coal blocks submitted affidavits in the Supreme Court. Attempting to ensure their blocks, 40 in all, are not deallocated along with those where mining has not started, these affidavits listed investments made, the quantum of coal produced and the production from the End Use Plant (EUP) paired with the block. A closer look at these submissions reveals a set of irregularities.
my previous story on the supreme court hearings into the captive coal block allocation was a bit of a curtain-raiser. it said when hearings resume on monday, the biggest question before the judges will be re: what to do with the blocks where mining has already started.
as things turned out, a set of industry associations and the government proposed a compromise formula to the apex court. among other things, they proposed that the SC levy a penalty of Rs 295 per tonne on coal mined — in the past and from now on. they also recommended that power producers with captive coal blocks be allowed to henceforth sell power only through longterm power purchase agreements (PPA) and not in the merchant market. in the story out today, i argue that this is a flawed idea.
On Monday, the Supreme Court will decide what to do with captive coal blocks, having deemed more than 200 allocations made since 1993 to be illegal. While writing their order, one of the biggest questions before Chief Justice R M Lodha and his fellow judges Madan Lokur and Kurian Joseph will relate to the 40-odd blocks where mining has already started. What should be done with those blocks? Should these blocks be treated leniently as, unlike most of the companies which squatted on their blocks, these actually began mining?