(EnergyAsia, March 12 2015, Thursday) — The Indian government’s attempt to solve the country’s decade-long energy crisis took an unexpected twist yesterday with the arrest of its powerful former Prime Minister Manmohan Singh and some his allies to face charges of corruption and criminal conspiracy related to the alleged illegal sales and allocations of the country’s coal deposits during his time in power.
Hindalco Industries tycoon Kumar Mangalam Birla, former coal secretary P. C. Parakh and three other individuals have also been charged. If convicted, the six accused, who have been ordered to appear in court on April 8, face life imprisonment. They have all denied the charges.
Singh, who was prime minister from 2004 until his Congress Party’s defeat in a general election last May, held the coal portfolio from 2005 to 2009 when most of India’s coal deposits were awarded to well-connected business and political allies who supposedly were neither qualified nor interested in mining the fuel.
Critics said most of the allocated blocks were never developed as they were used as collateral to trade favours, forcing the operators of India’s mostly coal-fired power plants to import the fuel at high cost. This led to India suffering a series of financial, economic and energy crisis that culminated in a three-day power supply cut-off affecting some 700 million people in the summer of 2012.
That dubious world record-setting power shutdown marked the start of Singh’s political demise as business, labour and student groups rallied popular support to demand an end to the coal-hoarding scandal.
Narendra Modi led his Bharatiya Janata Party (BJP) to a decisive victory with the promise to revive India’s once booming economy by reforming the economy with a focus on the country’s energy policies. Since taking power, Modi has unleashed the Central Bureau of Investigation (CBI) to boldly pursue criminal charges against his predecessor and those connected with the coal-fixing scandal.
The Modi government also paved the way for the Supreme Court to revoke all 218 allocations of coal reserves made between 1993 and 2010. A government audit claimed the reserves were given away or sold cheaply, costing the government billions of dollars in revenue.