A wide cross-section of the industry hit by the Supreme Court order cancelling coal blocks allocated between 1993 and 2010, has come together to appeal to the government to look after their interests when the next hearing takes place on September 1.
After the shock waves generated by the order had settled down, associations of coal producers, sponge iron manufacturers and power producers have been meeting for the past two days to work at several levels such as approaching the ministries as well as briefing their counsel.
Separately, the apex industry associations such as FICCI, CII and Assocham have also been making their views known. “We are sure the Supreme Court will take into consideration cases where production has begun and investments made, while giving its verdict on the blocks,’’ said CII Director General Chandrajit Banerjee.
Though Prashant Bhushan, the lawyer for the petitioner Common Cause, is confident that cancellation of all coal blocks is a settled issue, the industry feels the Court might have left the door open for a solution that will not affect the industry adversely.
An official of a company with interests in steel and coal was hopeful that there would not be an across the board cancellation of coal mines and the Court might settle on some kind of fine that could be suggested by a panel to be named at the next hearing. The industry’s stand was voiced by FICCI. “This judgement has once again brought to the fore concerns about the country’s policy regime and has the potential to disrupt restoration of investors' trust,’’ said FICCI president Sidharth Birla.
“We reasonably expect that any extreme step shall not compromise legitimate business and investors who participated in good faith in processes laid out over an extended period by the governments of the day,’’ he added.
Another official of a company pointed out that the problem arises from the fact that 31 coal mines are producing coal.
Up to 2012, Rs. 2.86 lakh crore have been invested in end use steel, cement and power projects. Add to it investments in coal mines, and it adds up to Rs. 4 lakh crore. Also, an estimated 10 lakh people are employed in these sectors, he said.
India needs to step up coal production. Despite being the third largest coal reserves in the world, India imported about 17 crore tonnes of coal last fiscal at Rs. 95,000 crore.
“If indeed these allocations were arbitrary and unfair, why did other players in the industry not complain all these years? No major country in the world mandates that coal can be mined only for captive use for steel and power plants,’’ said a senior company official.
While the private and the public sector hit directly by the order is active and not averse to joining hands, the Indian banking sector with a total exposure of Rs. 5 lakh crore wants to approach the issue differently. Financial institutions and banks, according to industry sources, have been asking the Finance Ministry to put across its views to the Attorney General.
“We are hoping that we will not suffer the same fate as the telecom sector which has been unable to recover after the Supreme Court cancelled 122 telecom licences in 2012,’’ said an industry association official.
