The ‘Coal Mafia’ plunders India

Recommendations

Info

POWER GRAB ‘COAL MAFIA’ PLUNDERS INDIA electronic auctions are locked out of the market. Auction data published in a local newspaper show that some lots of coal at mafia-dominated pits are sold at the auction floor price – well below market rates. “The mafia doesn’t let people participate in the tender process,” the power plant manager said. “Even if you win the tender, the local mafia won’t let you lift the coal.” Chain of corruption TARGETING SINGH MANSION Many trucks leave legal mine operations with unregistered When Suman Gupta rolled into Dhanbad in 2009 as the new police chief, she immediately put Singh Mansion on the defensive. Police under her watch searched cars loads to be sold to the black market. Others are adulterated with rocks and sold on to power companies. for weapons by day, and using a network of informants, conducted raids on illegal 3 Crime families pay mining company officials to look the other way as they run coal transport, contracting truck-loads of coal at night. She filed cases against Singh Mansion members, including charges of extorting coal merchants, but said she was unable to and trading scams. stamp out a system that involved politicians and mining officials. She was transferred 4 Crime syndicates scare off other bidders to keep prices artificially low after just two years as the Dhanbad police chief. News of her transfer sparked protests in the city. “I know (who the mafia were), but I for coal sold in online auctions. couldn’t take any action against them, because they’re politically well-connected. They have financial power,” Gupta said in an interview at her new posting in the city of Hazaribagh, which also lies in the coal belt. She said that over the decades, Singh 5 Workers pay a cut of their pay to crime bosses to work in their unions loading coal at depots. Mansion built close ties to officials at BCCL, the Coal India subsidiary, who pro- 6 Unions demand a “goon tax” from coal buyers before vided cover for the illicit business. BCCL could itself make a huge dent in the problem of illegal mining simply by putting fences around the mines and stationing loading any coal for them. guards there, she said. “We have registered many (police reports) against BCCL officials who were responsible for stopping this illegal mining, but they did not,” said Gupta. “There are 7 Coal traders pay bribes to the mining companies to get the quality of coal they need. many things they are supposed to do, but they are not doing it.” Lahiry, the BCCL chairman, said his 8 Coal buyers at power stations complain of getting loads of rocks with their coal, which impacts power production. crackdown on ties to Singh Mansion was Source: Reuters 1 2 Thousands of villagers carry coal from unregulated or illegal mines, and pull coal from open train wagons, to be sold on to mafia-run coal dumps. SPECIAL REPORT 6
POWER GRAB ‘COAL MAFIA’ PLUNDERS INDIA forceful. “Now a clear-cut message has been sent to everybody... that the company comes first, and the priority is the company’s interest.” ECONOMIC IMPACT The mafia also reduces productivity with labour stoppages. One senior BCCL official in Dhanbad said stoppages alone by one suspected mafia boss restrained output at some collieries by 10 percent. The exact economic impact of the coal mafia is hard to quantify; no comprehensive studies exist. A coal ministry tender to conduct the first investigation into the economic impact of criminal activities in the coal fields collapsed when no consultants bid for the contract. One research group said it decided not to bid because it was too dangerous for its staff. Other issues bedevil Coal India – snarly regulations, enormous difficulty in acquiring land for mining, a shortage of railway lines to move product. But corruption is so widespread, Jaiswal told Reuters, that just cleaning up the system would raise official output by at least 15 percent. That won’t be easy. Coal-industry executives say that even if they root out the established coal mafia, newcomers are waiting in the wings. Walls in and around Dhanbad feature a scrawled new slogan that is shaking up the old mafia order: “Long live Dhulu Mahto.” Like the founder of Singh Mansion, Mahto is a state legislator who started from humble beginnings as a coal worker and then union boss. He is the champion of a new class of rootless workers who don’t work for the big coal companies. Their ranks have steadily grown as the coal companies lease out their pits to private companies, who in turn look for contract workers. People in Dhanbad call him “new mafia.” His influence falls over mines that account for a third of BCCL’s production, a senior BCCL official in the area said. Some mines would produce at least 10 percent more coal if Mahto, 37, were to stop leading labour strikes, the official said. A recent public-interest suit filed in the Jharkhand high court by advocate Somnath Chatterjee sought an official inquiry into DIRTY BUSINESS: Thousands, including this young man covered in soap after a hard day’s work, labour in unregulated pits in the coal belt. REUTERS/AhmAd mASood the source of Mahto’s wealth, which the suit estimated at $36 million. Mahto denied he was a gangster and said accusations he was involved in the illegal coal trade were politically motivated. “We don’t want to be kings,” he said, grinning broadly and surrounded by supporters at his mansion overlooking an abandoned pit outside Dhanbad. “We just want to serve.” Edited by Bill Tarrant and Michael Williams; Additional reporting by Malini Menon, Prashant Mehra and John Chalmers FOR MORE INFORMATION Frank Jack Daniel frank.daniel@thomsonreuters.com Matthias Williams matthias.williams@thomsonreuters.com John Chalmers, South Asia editor john.chalmers@thomsonreuters.com Bill Tarrant, Enterprise Editor william.tarrant@thomsonreuters.com Michael Williams, Global Enterprise Editor michael.j.williams@thomsonreuters.com © Thomson Reuters 2013. All rights reserved. 47001073 0310. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks and trademarks of Thomson reuters and its affiliated companies. SPECIAL REPORT 7
Page 1 and 2: POWER GRAB The ‘Coal Mafia’ plu
Page 3 and 4: POWER GRAB ‘COAL MAFIA’ PLUNDER
Page 5: POWER GRAB ‘COAL MAFIA’ PLUNDER

The ‘Coal Mafia’ plunders India

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?