The note issued by the Prime Minister’s Office (PMO) today on the allocation of the Talabira II and III coal blocks in Jharsusguda district to Aditya Birla Group company Hindalco debunks Odisha Chief Minister Naveen Patnaik’s claim that the power to allocate coal blocks rests ‘entirely’ with the Central government.
“Under the MMDR Act, the mining lease for coal is granted by the State Government with the previous approval of the Central Government. Thus, under the federal framework of sharing mining rights as provided under the Act, both the Central and State Governments need to concur before an allocatee can be granted a mining lease. Accordingly, the strong recommendation of the Government of Odisha is important and has to be given due consideration while taking a decision in the matter,” said the note issued today.
According to sources in the PMO, the Odisha government headed by Naveen Patnaik had ‘heavily urged’ the Centre to grant the coal blocks to the Birla group company, which played a large role in the Prime Minister’s decision who was also the Coal Minister at the time.
The PMO note described the decision to allocate two coal blocks in Odisha to a company owned by industrialist Kumar Mangalam Birla as “appropriate and based on the merits of the case” placed before Dr Manmohan Singh. However, contrary to perceptions that the PM’s statement has in a way exonerated Odisha chief minister Naveen Patnaik, it has actually posed more problems for the latter.
Patnaik, it may be noted, had written to the Prime Minister stating that it would generate more jobs and industrial growth than the state-owned NLC’s power-generating plant. But the fact that a Birla trust donated an amount of Rs 7.53 crore to the ruling Biju Janata Dal (BJD) in three instalments before and after the 2009 general elections has left plenty of room for allegations of ‘quid pro quo’.
In any case, the CBI has said that Dr Singh’s office has not been cleared yet in its inquiry into what it alleges was a criminal conspiracy between the government’s Coal Secretary PC Parakh and Mr Birla, both of whom have denied any wrongdoing. Now it is open to the CBI to examine if Naveen Patnaik was in any way linked with the conspiracy.
The coal licenses that were granted to Birla’s firm, Hindalco, are being investigated by the CBI as part of its inquiry into how and why the government gave mining rights at under-priced rates to private firms, costing the country lakhs of crores according to the national auditor.
In 2005, the government decided these blocks should be given to the state-run Neyveli Lignite Corporation and Mahanadi Coalfields Limited but later decided that Hindalco should get part of it.