Centre asks Odisha to expedite pending coal mine lease applications

Last Updated: Thu, Dec 13, 2012 21:26 hrs

Union coal ministry has directed the state government to expedite processing of pending coal mining lease (ML) applications while replying to a letter forwarded by Odisha Chief Secretary B K Patnaik seeking the ministry’s view over granting ML to companies which had been allotted blocks without auction.

The state government had sought to know whether it would be proper to grant ML to six companies which were distributed blocks prior to the amendment of Mines and Minerals Development and Regulation (MMDR) Act, which said coal blocks may be allotted through the auction route.

“As regards to the issue of processing of the ML applications of coal block allocatees, who were allocated blocks prior to the amendment of MMDR Act... the Ministry of Law and Justice has opined that 'there does not appear any legal restrictions,” Union coal secretary S K Srivastav said in his reply to the state government’s query.

The recent amendment inserted in the MMDR Act, 1957 in Section 11 A says that the Central government should select allocatees through a competitive bidding companies, which are engaged in steel, power and other related activity.

These amendments were made earlier this year, much later than the allocation of blocks, happened between 2004 and 2009.

The state government had also cited Supreme Court reference over 2G scam case, in which the apex court had said that all natural resources must be auctioned and wanted to know the status of the six mines.

The Centre replied that since the SC has admitted that auctioning of natural resources is not the only option to allocate them in its observation on Presidential Reference, there is no question of irregularity.

“The bench clearly stated that auctions may be the best way to maximize revenue, but when revenue maximisation is not the ultimate motive of the policy, natural resources can be allocated by methods other than auction,” the coal ministry official said.

Stating that the Coal Ministry had clarified the matter earlier on a similar issue raised by the Maharashtra government, Srivastav said, “Till any irregularities are brought out in specific cases, due action can be taken by Odisha government under MMDR Act as to the development of coal blocks as well as executing the pending mining leases.”

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