The Odisha state government has frozen the final clearances for coal blocks allocated to private companies between 1993 and 2012, bringing projects worth thousands of crores of rupees to a standstill.
There appears to be a fear psychosis in the state after the Central Bureau of Investigation, probing what has become known as the 'coalgate' scam, filed a report against Kumar Mangalam Birla, chairman of the Aditya Birla Group, and former union coal secretary P C Parakh (See: Coalgate: Kumar Mangalam Birla, Nalco, Hindalco in CBI's new FIR).
"In view of the pending litigation and investigation by CBI and other agencies, we consider that proceeding further in respect to such allocations may not be advisable till the settlement of pending litigation and closure of investigation," Odisha chief secretary J K Mohapatra said in a letter to union coal secretary S K Srivastava on 23 October.
The central government had allocated about 30 coal blocks in the state to various companies during 1993-2012. Several of these allocations are now under investigation.
According to a Reuters report, a state government official told the agency on Monday that only one coal block, Talabira-I, granted to Hindalco Industries Ltd (a Birla company) is now in operation. The remaining 29 blocks are at different stages of processing for grant or execution.
Some of the coal block allocations are now the subject of public suits before the Supreme Court.
The apex court directed the state government to submit its response on various issues related to such allocations two months ago.
The CBI also initiated enquiry into some of these past allocations.
''So far, we have not received any advisory or information concerning investigations into the coal blocks allocated in the state, leaving us unsure of further steps to be taken in pursuance of allocation,'' Mohapatra said in his letter to Srivastava.
''Therefore, in view of the pending litigations and investigation by the CBI or other agencies, we consider that proceeding further in respect of such allocations may not be advisable till the settlement of pending litigation or closure of investigation.''
The companies likely to be affected by the Odisha decision include ArcelorMittal, Tata Power, Reliance Energy, Lanco Group, Jindal Group firms, GMR Energy, Sterlite Energy, Bhushan Steel, and state-owned Nalco.