Coal news and updates

Government may change rules for linkage allocation

January 19: The government is considering plans to change the rules of allocation of coal linkages by strengthening the process of allocation to ensure that no one in future raises any question, a senior official from the Ministry of Coal has said.

“It (linkages) raises the issue similar to coal block allocation because until and unless the process of allocation of linkages is transparent and done through a process which stands the test of law, my hunch is that at some point even this will be questioned,” Secretary (Coal) Anil Swarup said.

Swarup was responding to a question during an interaction at the Merchants’ Chamber of Commerce in Kolkata on whether the government is considering plans to introduce the process of auction even in allotment of coal linkages.

At present, there is a committee under the Ministry of Coal, which examines applications for linkages and based on certain parameters, allocates.

“That may not be fully transparent as desired by the courts in the recent judgments. We are not saying what was done was wrong. We are not passing a judgment on that. We have just set up a committee under the chairmanship of the Additional Secretary of Coal. It is an inter-ministerial committee to examine in the light of various judgements that had happened,” Swarup said.

This was done to ensure that down the line someone may not raise questions about the entire process of allocation of linkages.

“We want to precisely examine whether it will stand the test of law, in terms of the recent judgments. If not, then how to correct the process and make it totally transparent as we are doing with the coal block allocation. No one must be able to say that I am trying to favour someone,” he said.

Swarup said, one may stand to lose if there is any change in the process of allocation of linkages and there could be some co-lateral damage to some of the units, but the aim is to ensure that no one can say someone is being favoured or not.

“And that’s what we are thinking in terms of linkages. Can we make them transparent? can we have objective parameters so that no one questions u? I mean, people keep meeting me and ask when will they get a linkage,” Swarup observed.

“On what criteria should I give linkage to A and not to B? These are questions that this linkages committee will look into. They may come with a justification which will stand the test of law,” the coal secretary said.

On pointing out that if the auction system was introduced in allocation of linkages, the units which are closer to mines would stand to benefit as they will be able to bid higher because they will be saving a lot on transportation costs, Swarup said, “I can enter into discussion on the topic purely on economic grounds. But the point is if I do that even with objective criteria, which can be justified, it is fair enough. But opportunity should be given to everyone and that’s the point we are making.”

“Whatever be the criteria, there should be no second interpretation of the provisions that we have. Everyone should have the same meaning and once that happens, I think, each one of us will benefit. One or two persons may stand to lose out but, by and large, the country should stand to benefit from the transparent process that we are trying to put in place,” he added.