no easy way to clean up the upa’s coalgate mess

last week, the supreme court finished hearing all arguments on whether the coalblock allocations should be cancelled or not. in the coming weeks, we will know india will find a sensible conclusion to the whole #coalgate saga or not. based on what we have reported so far, this can still go either way. the government wants it to be allowed to do a partial deallocation — take back some of the coal blocks it gave out. others want a full deallocation.

the story today argues that both these options come with a large set of pain. which, by itself, stands testimony to the irresponsibility of the upa government.

The hearings are over and an order is expected from the country’s highest court soon. The fate of 218 coal blocks given to companies for captive use will be secured or sealed. At present, it is uncertain whether all allocations will be scrapped on account of an allegedly flawed process adopted by the government—as the Supreme Court ruled for mobile telephony licences given in 2008 —or only select blocks will be taken back. Either way, both outcomes will be messy, for different reasons.

as things stand, this is the fifth in a series of stories on how the attempts to fix coalgate were coming along. am appending links to the preceding ones.

4. the previous one looked at the UPA’s claim that over Rs 200,000 crore was at stake.

Last week, defending the Centre in its coal-block allocations, Goolam Vahanvati, the government’s top law officer, told the Supreme Court that companies had invested Rs 2,00,000 crore in their captive blocks. Some industry players have been citing this figure as the financial cost of a complete cancellation of licences. But ET calculations on the estimated cost of developing a mine, and the possible alternatives to cancellation before serious players, suggest this figure might be an overstatement.

3. the one before that, done last year, looked at how the investigations and court hearings were puttering along.

Fires from coal block allocations, which erupted in mid-2012, are threatening to engulf more. Its latest surge has touched an industrialist(Kumar Mangalam Birla), a bureaucrat (PC Parakh)and the prime minister (Manmohan Singh). While the conversation today is about these individuals, five larger questions merit attention. The answers to these have a bearing on how much a consumer pays for electricity, whether a thermal power plant stays in business or not, how many more industrialists, bureaucrats and companies will be prosecuted in this issue, and when— and if—coal-rich India will meet its own needs. The prognosis is not good.

2. and well before all these, sometime in 2012, when coalgate had just entered the nation’s consciousness.

The Central Bureau of Investigation (CBI) filed its first FIRs this week. According to media reports, at least 10 more are expected soon. The Inter-Ministerial Group, comprising bureaucrats from ministries like steel, power and finance, and chaired by additional secretary (coal) Zohra Chatterji, is in the process of deciding what to do with errant captive blocks. Even at the time of going to press, the group is quizzing the companies whose 58 blocks are running badly behind schedule.

And then, there is the Public Accounts Committee (PAC) chaired by BJP leader Murli Manohar Joshi which will look into the report of the Comptroller and Auditor General on the coal mess. And it is the PAC which will vet whether the CAG’s observations on captive coal block allocations are valid or not.

However, these institutional responses invite a large question: are these institutional responses we are seeing are enough to clean the sector up? And the short answer to that question is: no, they aren’t. The remedial measures we are seeing focus largely on how captive coal blocks were allocated. But the mess in coal runs way deeper.

1. and before that, in september, 2012, this one.

From discussion—in Parliament, the lack of it—to action. The story of alleged irregularities in the allocation of coal blocks to private players for captive use is taking a distinct turn, with institutions at three levels responding within their jurisdiction, and a chance of a fourth one stepping in.

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