News Wrap


The Supreme Court has declared allocation of all the 218 coal blocks made since 1993, as ‘‘illegal and arbitrary’’. It has held that the Union Government of India had no power of allocation, under the relevant rules. The three-judge bench of 25 August 2014, ruled that the whimsical and non-transparent procedure of allocation had resulted in ‘‘unfair distribution of the national wealth in the hands of few private companies’’. The allocations relate to the period from 1993 to 2011, during the regimes of both the BJP-led NDA and the Congress-led UPA governments. Over 190 of those blocks were allocated during the tenure of the UPA government.

India’s power generation capacity has grown by 60% over the past five years, but coal production has increased by 6% only. At close to 53 million tons in 2014-15, the captive blocks produce around 9% of India’s total coal production. Total amount of coal expected to be produced by Ultra Mega Power Projects (UMPP) in 2014-15 stands at two million tons. If this coal were to be imported, an additional expense of Rs 17,300 crore per year is required. The Union Government of India pleaded before the Supreme Court that it wants a ‘‘re-auction’’ of the coal blocks, but sought exemption for 40 which are operational, and another six which are ready to begin work soon.

Wages of convicts
At six central correctional homes in West Bengal, the state government has not paid wages for the past three years. Dues to the convicts exceed Rs 5 crore. In comparison, states like Uttar Pradesh are providing bonus to the inmates of central correctional homes. The convicts’ dues have accumulated over the last few years. 50% of the convicts’ wages, earned by the convicts, are spent for giving fees to the advocates. If the dues are not cleared timely, it becomes difficult to pay for legal fees. There are around 5900 convicts imprisoned at six central correctional homes, viz Alipore, Presidency, Dum Dum, Midnapore, Berhampore and Jalpaiguri. Wages of around Rs 1 crore are pending at Berhampore correctional home. Other correctional homes have wages of convicts pending, amounting to Rs 1 crore or more. Inmates of correctional homes are demonstrating inside prisons, claiming their dues were pending for nearly two years. In West Bengal prisons, unskilled workers, skilled workers and semi-skilled workers are paid Rs 26, Rs 35 and Rs 30 respectively, per day as wages.

Fuel smugglers in Libya
There is a desperate shortage of fuel in Tripoli and other towns of Libya, as Libyan militia groups are earning huge amounts by smuggling some of the world’s cheapest fuel, on trawlers to Malta. The Libyan authorities have been forced by the shortages to import oil from Europe, worth 6.6 million Pound in 2013 and about 8 million Pound in 2014. Half of the imported oil is being stolen by the militia, and shipped abroad. With the security breakdown, smuggling has massively increased in the last thirty months. All land and sea borders in Libya are completely out of control. Since the Libyan government subsidises its imports for sale to the public, the trade is costing Libya nearly 3 billion Pound annually. Smuggling of subsidised fuel has caused an economic collapse. The illegal trade has been flourishing in the chaotic aftermath of the 2011 revolution, that toppled Muammar Gaddafi. Most of the contraband fuel went across the border with Tripoli, until recently. Tightened security has forced smugglers to find new routes. Selling Libyan petrol to Maltese smugglers, coastal militiamen who control access to routes across the Mediterranean, are making upto 2500 Pound a day. An increasing number of poor and unemployed youths, living in Libya’s port cities, are joining in. Heavily armed groups of ex-rebels, who fought against Gaddafi, and are now on government pay-roll, control the smuggling.

China’s ‘aid’ to South America
In return for access to oil, food and minerals, China is offering billions of dollars in credit, to cash-strapped leftist leaders in South America. With Venezuela and Argentina virtually locked out of global capital markets, the Chinese president, Xi Jinping has thrown a monetary life line to Nicolas Maduro, President of Venezuela and Cristina Kirchner, President of Argentina. China has signed a series of oil and mineral deals with Venezuela, after offering loans worth $ 4 billion (2.3 billion Pound). The socialist government of Venezuela will repay China with crude oil, from its huge reserves. China has pledged $ 11 billion of financing to Argentina, which is facing a potentially crippling default. A Hong Kong consortium is starting work on a canal across Nicaragua in December 2014. The $ 40 billion project will rival the US built Panama Canal. Environmentalists and labour organizations across the region, have accused Chinese companies of clearing Amazon forest in Ecuador to get to oil fields; and of causing deforestation in Brazil, through its demand for soya beans, and of ignoring workers’ rights. China will import oil and food from Argentina, and oil and gas from Venezuela.

Vol. 47, No. 18, Nov 9 - 15, 2014