gfiles Magazine November Issue 2011

SPECIAL REPORT

sks ispat

 

 

Coal Ministry playing favourites

How Minister Subodh Kant Sahay lobbied with the PMO for coal concessions for a company in which his brother has an interest

 

 

by K SUBRAMANIAM

 

THE inside story of Indian coal is as black as the mineral itself. The markets are agog over India facing an acute shortage of coal. Had the planners sitting in the Coal Ministry been a little wiser, this situation could have been avoided. The country needs around 537 million tonnes of coal annually and it is short of 48.4 million tonnes every year.

 

The Coal Ministry, aware of the shortage, allotted 290 coal blocks long ago but only 25% of them are producing coal. Notices are being issued to the allottees but, beyond this, the Coal Ministry’s hands are tied. This is a result of things that India has become famous for, such as Cabinet Ministers openly pushing the interests of relatives. One glaring instance is of Subodh Kant Sahay, Cabinet Minister for Tourism, lobbying brazenly with the PMO for additional coal blocks for SKS Ispat & Power Ltd, a company with which his brother, Sudhir K Sahay, is a Director. This was despite the company failing to open up already allocated mines.

 

Four years ago, SKS Ispat was given a coal block with reserves of 170 million tonnes in Rawanwara, Madhya Pradesh, though its requirements were a rather nominal 12 million tonnes.

 

The company is yet to open this mine. The Coal Ministry has issued several showcause notices for cancelling the allotment but SKS Ispat has still not opened the mine. It has cited one or other reason for failing to do so.

 

Surprisingly, the Ministry refrained from going ahead and cancelling the allotment. On the other hand, it allocated two more coal blocks, Vijay Central and Fatehpur in Chhattisgarh, to the company.

 

There is only vacant land at SKS Ispat’s site at Raigarh and there are no signs of any attempt to construct a power plant. In the three years since the Fatehpur coal block was allocated, only a boundary wall has come up.

 

 

Sudhir K Sahay, who is the brother of Subodh, had attended the screening committee meeting of the Coal Ministry as a Director of SKS to present their case for allocation.

 

 

A PIL filed in Ranchi High Court alleges that Sahay has links with SKS Ispat. Moreover, while the Vijay Central and Fatehpur coal blocks were under consideration for allocation at the Coal Ministry, Sahay wrote to the Prime Minister, seeking his personal intervention in the allotment. The PMO then wrote to the Ministry.

 

Another writ petition in Delhi High Court alleges that these two coal blocks were allocated to SKS Ispat on political interference by Sahay. Documents obained through the RTI Act show that Sudhir K Sahay attended the Screening Committee meeting of the Coal Ministry as a Director of SKS Ispat to present the company’s case. Worse, SKS Ispat had sought coal requirement for its 600 MW power plant but the allocation by the Ministry was for a 1000 MW plant. Political interference and favouritism has led to the allocation of scarce national resources to unknown entities for personal gain, flouting all norms and reasoning.

 

 

SKS Ispat has been in the news on several occasions – for issues ranging from establishing an illegal coal washery, flouting pollution norms and disputes over land acquisition with land owners. Obviously, it is political clout that has kept it off-limits for government officials. g