As Coalgate rocks India, an inside account of Jharia-Dhanbad reveals just how high the stakes are. Anando Bhakto reports
The nondescript houses in coalfields and the roofless, dilapidated collieries dotting the dusty landscape of Jharia-Dhanbad in Jharkhand, the country’s mineral rich belt, give you no clue that this could be the breeding ground of 24x7 scams involving hundreds of crores of rupees made right under the nose of the administration, often with its connivance.
How does the racket work? Since it is dangerous in open cast mines to dig coals beyond prescribed limits, the Bharat Coking Coal Limited (BCCL) and CIL (Coal India Ltd) do not mine after a point and it is here that illegalities begin.
According to estimates, there are over 2,000 open cast mines in Jharkhand. The coal mafia employs labourers, sometimes those working for coal companies, and then smuggle coal through an organised and elaborate network of cycle carriers.
Apparently, everyone knows. ``Illegal mining and its transport in Jharkhand have become a booming racket for the mafia to reap in huge chunks of black money. This involves everybody, from top officials of the BCCL to the police and politicians,” candidly admits Niraj Singh, Dhanbad Deputy Mayor.
According to information provided by the Ministry of Coal to the Standing Committee of Coal and Steel in 2010, there are 49 illegal mining sites. They include Katras, Baroda, Govindpur, Sijua, Kusunda, Kustore, Bastacolla, Lodna, EJ Area and Chach Victoria under the BCCL.
Coal companies seem to be hand in gloves with the mafia. What else can explain why they do not fill voids created after mining by way of sand stowing, an obligatory duty under the Mine Closure Plan - thus paving the way for illegal mining of coal?
Despite the Ministry of Coal admitting the presence of predominant illegal mining sites in eastern regions before its own Standing Committee, no definitive government study has so far been conducted to assess financial losses suffered by exchequer. And there is a good reason why – the losses are enormous.
Interestingly, the Jharkhand government did instruct Jamshedpur-based Xavier Labour Research Institute (XLRI) to conduct a study with a limited reference point. Says Professor Tata L Raguram, the man behind the study, “The study we did was on small scale, artisanal coal extraction and cycle-based coal supply chains that operate in coal tracts of Jharkhand. The study did not trace large scale illegal coal operations.”
Even so, their findings were alarming. It revealed that 1.37 million tons of coal (estimated to be worth Rs 207 crores) is mined from abandoned sites around Jharkhand every year. Experts mention that due to this the exchequer in the state suffers an annual loss of Rs 34 crore as royalty per annum. What would be the magnitude of revenue losses caused by this organised coal racket? In the lack of any definitive study, such losses are neither assessed nor any attempts made to make changes appropriately.
In view of the XLRI findings, the Standing Committee accused responsible officials of “either indifference or too scared to stop the menace.”
Such is the dominance of the coal mafia that the transport of coal and coke by unlicensed cycles is a regular sight on the Ranchi-Hazaribagh road: there are a total of 616 FIRs which have been lodged in Ramgarh, the sub-divisional headquarters.
Cases against illegal coal operators can be lodged by anyone, government officials or coal companies. Then there are major security lapses at many points when coal is transported from mines to railway sidings. Observed the Standing Committee, “The complicity of some insiders of coal companies with the coal mafia cannot be ruled out… Generally large chunks of coal are thrown off from uncovered wagons and trucks along their routes.” Just one sign of this malignancy.
Add to it vast amounts of illegal monies made by the mafia in loading and transport of coal. According to Deputy Mayor Singh, one lakh ton coal is transported everyday, of which 20,000 tonnes are transported by road on trucks and 80,000 ton by railways. “While Rs 160 per ton is charged for loading of coal to be transported by road, only Rs 80 is paid to labourers who are hired on contractual basis. The remaining Rs 80 goes unaccounted. This means in loading 20,000 tons of coal, around Rs 16 lakh worth of black money is generated everyday. The first part goes to the police who, understandably, refrain from taking any action against culpable parties. The second goes to ‘babus’ in collieries, the third to middle men controlling labourers and the fourth part to conniving officers in BCCL,’’ alleges Singh.
Significantly, contractual labour is prohibited in the coal industry. The BCCL which in 2005 had sought exemption from the Labour and the Coal Ministry to outsource labourers, has not abolished the contract system even though exemption ended in 2010.
It is common knowledge in Jharia that a sizeable part of the money to be paid as wages to labourers is swindled by a closely knit group of coal mafia and officials. “While outsourcing labourers, the least the BCCL could do is to credit their wages directly to their bank accounts, thus ending any scope of foul play. Why do they insist on paying in cash?” questions Deepak Dutta, member of Jharia Coal Field Bachao Samiti (JCFBS).
Then comes in an essential ingredient of the coal industry – the rangdari tax or extortion. According to a dealer at Rajapur colliery at Katras Mod, who naturally prefers anonymity, anything between Rs 1000 to Rs 3000 is taken for every truck by bahubalis (muscle-men) who work for mafias.
“This works out substantially on a daily basis as there are about 1,300 trucks engaged in transporting coal,” Datta told this magazine.
The nondescript houses in coalfields and the roofless, dilapidated collieries dotting the dusty landscape of Jharia-Dhanbad in Jharkhand, the country’s mineral rich belt, give you no clue that this could be the breeding ground of 24x7 scams involving hundreds of crores of rupees made right under the nose of the administration, often with its connivance.
How does the racket work? Since it is dangerous in open cast mines to dig coals beyond prescribed limits, the Bharat Coking Coal Limited (BCCL) and CIL (Coal India Ltd) do not mine after a point and it is here that illegalities begin.
According to estimates, there are over 2,000 open cast mines in Jharkhand. The coal mafia employs labourers, sometimes those working for coal companies, and then smuggle coal through an organised and elaborate network of cycle carriers.
Apparently, everyone knows. ``Illegal mining and its transport in Jharkhand have become a booming racket for the mafia to reap in huge chunks of black money. This involves everybody, from top officials of the BCCL to the police and politicians,” candidly admits Niraj Singh, Dhanbad Deputy Mayor.
According to information provided by the Ministry of Coal to the Standing Committee of Coal and Steel in 2010, there are 49 illegal mining sites. They include Katras, Baroda, Govindpur, Sijua, Kusunda, Kustore, Bastacolla, Lodna, EJ Area and Chach Victoria under the BCCL.
Coal companies seem to be hand in gloves with the mafia. What else can explain why they do not fill voids created after mining by way of sand stowing, an obligatory duty under the Mine Closure Plan - thus paving the way for illegal mining of coal?
Despite the Ministry of Coal admitting the presence of predominant illegal mining sites in eastern regions before its own Standing Committee, no definitive government study has so far been conducted to assess financial losses suffered by exchequer. And there is a good reason why – the losses are enormous.
Interestingly, the Jharkhand government did instruct Jamshedpur-based Xavier Labour Research Institute (XLRI) to conduct a study with a limited reference point. Says Professor Tata L Raguram, the man behind the study, “The study we did was on small scale, artisanal coal extraction and cycle-based coal supply chains that operate in coal tracts of Jharkhand. The study did not trace large scale illegal coal operations.”
Even so, their findings were alarming. It revealed that 1.37 million tons of coal (estimated to be worth Rs 207 crores) is mined from abandoned sites around Jharkhand every year. Experts mention that due to this the exchequer in the state suffers an annual loss of Rs 34 crore as royalty per annum. What would be the magnitude of revenue losses caused by this organised coal racket? In the lack of any definitive study, such losses are neither assessed nor any attempts made to make changes appropriately.
In view of the XLRI findings, the Standing Committee accused responsible officials of “either indifference or too scared to stop the menace.”
Such is the dominance of the coal mafia that the transport of coal and coke by unlicensed cycles is a regular sight on the Ranchi-Hazaribagh road: there are a total of 616 FIRs which have been lodged in Ramgarh, the sub-divisional headquarters.
Cases against illegal coal operators can be lodged by anyone, government officials or coal companies. Then there are major security lapses at many points when coal is transported from mines to railway sidings. Observed the Standing Committee, “The complicity of some insiders of coal companies with the coal mafia cannot be ruled out… Generally large chunks of coal are thrown off from uncovered wagons and trucks along their routes.” Just one sign of this malignancy.
Add to it vast amounts of illegal monies made by the mafia in loading and transport of coal. According to Deputy Mayor Singh, one lakh ton coal is transported everyday, of which 20,000 tonnes are transported by road on trucks and 80,000 ton by railways. “While Rs 160 per ton is charged for loading of coal to be transported by road, only Rs 80 is paid to labourers who are hired on contractual basis. The remaining Rs 80 goes unaccounted. This means in loading 20,000 tons of coal, around Rs 16 lakh worth of black money is generated everyday. The first part goes to the police who, understandably, refrain from taking any action against culpable parties. The second goes to ‘babus’ in collieries, the third to middle men controlling labourers and the fourth part to conniving officers in BCCL,’’ alleges Singh.
Significantly, contractual labour is prohibited in the coal industry. The BCCL which in 2005 had sought exemption from the Labour and the Coal Ministry to outsource labourers, has not abolished the contract system even though exemption ended in 2010.
It is common knowledge in Jharia that a sizeable part of the money to be paid as wages to labourers is swindled by a closely knit group of coal mafia and officials. “While outsourcing labourers, the least the BCCL could do is to credit their wages directly to their bank accounts, thus ending any scope of foul play. Why do they insist on paying in cash?” questions Deepak Dutta, member of Jharia Coal Field Bachao Samiti (JCFBS).
Then comes in an essential ingredient of the coal industry – the rangdari tax or extortion. According to a dealer at Rajapur colliery at Katras Mod, who naturally prefers anonymity, anything between Rs 1000 to Rs 3000 is taken for every truck by bahubalis (muscle-men) who work for mafias.
“This works out substantially on a daily basis as there are about 1,300 trucks engaged in transporting coal,” Datta told this magazine.
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