Fit and Proper test report.

PREFACE
The government in an effort to boost the economy and accelerate the development of coal mining has made certain important legislative and policy changes. Despite the lukewarm response to its earlier ten tranches of the auction, the government under the new Act and after allowing for 100 percent Foreign Direct Investments, embarked on the 11th tranche on 18th June 2020.

In January 2020, the Government had come up with a list of 80 coal blocks through a discussion paper and sought suggestions from the potential bidders as to which of the blocks should be prioritized. Ultimately, the call began with 41 blocks but with protests and interventions from State Governments, some blocks were removed and some new included to have 38 blocks.

As the auction process went ahead, only 21 blocks have been able to draw more than one bid. One of the companies has failed even the lax technical conditions. The world over, recognizing the reality of the resource curse, governments have been embarking on conducting a fit-and-proper person test. This evaluates the company’s credentials from various angles to ensure that national wealth is not handed over to any entity
which has a poor track record.

Unfortunately, our country seems to be heading south when it comes to corporate due diligence, and as this preliminary report indicates that none of the bidders are fit-and-proper persons to whom the Government as custodian is trying to hand over the resources. We seek proper due diligence and also want to record the potential conflict of interest between the PMU at the coal ministry and its involvement with private players. Failure to
ensure this is a failure of the constitutional responsibilities of the government and a burden on our society.