In India, the Supreme Court has given seven coal mining states in the country until October 29 to explain their role in the allocation of coal resources to mining companies. The justices also want these states to give details of agreements between state-level public-sector companies allocated coal resource blocks and private enterprises. The seven states are Andhra Pradesh, Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha and West Bengal, and the Supreme Court issued its instructions to them on September 26.

This is the latest development in a coal block allocation scandal which emerged some 18 months ago (and is dubbed, inevitably, Coalgate) and that has rocked India. It is alleged that coal blocks were issued to private parties at prices way below market value. What makes this especially explosive is that some of these activities apparently took place in the period from 2005 to 2009, when India’s current Prime Minister, Manmohan Singh, was Coal Minister – in India, coal mining falls under a dedicated Ministry of Coal. It is claimed that powerful private individuals and companies linked to the currently ruling Congress Party benefited from these allocations, which violated government procedures.

The scandal surfaced when India’s Com-ptroller and Auditor-General reported that coal blocks had been allocated, on a case-by-case basis and in a manner lacking transparency and objectivity, to private companies. As a result, a major investigation has been launched by the country’s federal investigative agency, the Central Bureau of Investigation (CBI).

In response, last year government claimed that coal block allocation was not seen as a revenue-generating procedure but as a means to stimulate economic growth, and that the low prices charged for the allocations would reduce electricity prices for consumers. (The vast majority of coal mined in India is used to generate electricity.)

The CBI recently reported that dozens of relevant Coal Ministry files had not been found, giving rise to claims that they had been stolen to protect senior officials and politicians. Government responded that more than 150 000 pages of documents had already been handed over the the CBI and that thorough investigations would be held into any missing files.

The national government is also claiming that the Coal Ministry merely identifies the coal blocks and, at the most, issues a letter of intent to the companies concerned. Actual allocation, New Delhi claims, is done by the state govern-ments.

Although the Supreme Court has noted that the Indian government’s submissions to it on the allocation process were “contradictory”, it issued the notices to the states to help clarify the process. The Court has required that the answering submissions from the seven states must be made by high-level officials. In the meantime, the Supreme Court has refused to issue any order maintaining the status quo with regard to the allocation of coal blocks to companies. The justices are looking at coal block allocations all the way back to 1993, and could cancel allocations if it determines that these were made illegally.