Coal block allocation: Indian ‘elGordo’!

AK Ramdas 07 September 2012

Essar Power’s acquisition of Navabharat Power is one of the many facets of the Indian ‘elGordo’ where the windfall gain will run for decades, unlike its Spanish counterpart!

Since 1812, the Spanish Public Administration has carried on a national lottery system, which eventually became popularly known as the Christmas Lottery, also called, as “elGordo”—the fat one! This is the biggest lottery world wide.

The top prize money amounts to 540 million euros and 180 series of tickets sold at 200 euros apiece. As the cost is rather high, and in order to facilitate everyone to afford a purchase, the ticket is further divided into one-tenth or also known as the ‘decimos’. The Spaniards look forward to getting a piece of the action by buying the tickets.

Looks like the Indian version of the ‘elGordo’ is in getting a coal block allotment and actually commencing the mining operation after overcoming all the hurdles put up by the state and MOEF (ministry of environment and forests), and cap it by discovering millions of tonnes of high grade thermal coal!

In reality, however, the 58 allottees that are under the CBI (Central Bureau of Investigation) scanner and also answering the various queries raised by the Inter Ministerial Group may have many different things to say in their defence. It will be a while before the final outcome of these investigations, FIRs, etc are made public!

The enthusiastic press have gone deep into the bowels of the earth and have discovered much more muck than coal. For example, a report that has appeared in the Times of India gives an in-depth detail of the several transactions that have taken place.

In the case of Navabharat Power, it was registered with a capital base of just Rs1 lakh, which signed an MOU (Memorandum of Undertaking) with the Orissa government to invest Rs9,675 crore in two—1,060 MW and 1,200 MW—power plants in Dhenkanal. It got a 4.7 million tonne (MT) of coal linkage in May 2006. Two years later, in January 2008, it got an additional 112 MT allotment from Orissa’s Rampia and Dipside coal block. Although 108 applications were received for this block, only two were invited (why?) to make a presentation and the final allotment went to Navabharat, although there were some real heavy-weights in the fray. Anyway, by 2011, the stakes were sold to Essar Power, for an enormous sum of money.

This is one of the many facets of the Indian ‘elGordo’ where the windfall gain will run for decades, unlike its Spanish counterpart!

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