Over 2 ½ years back, a leaked draft report of CAG shook the nation with screaming headlines depicting a Rs 10 lakh crore notional loss to the nation due to coal block allocations. A few months later the notional loss drastically shrunk to Rs. 1.76 lakh crore, yet remained ballistic enough to shake many business empire deep down to their roots. An example of a business empire that stands shaken up from its core is the carefully curated business model rightfully patented to Naveen Jindal, if he had applied for one.
It was the remarkable long-term foresight of Naveen Jindal to integrate backwards going to the unexplored terrains to dig out coal from far-flung locales, making JSPL the most profitable Steel and Power major. The core strength of JSPL today stands under a big question mark with the government indicating its willingness to impose an additional Rs. 259 per tonne levy on coal miners excavating coal for their steel and power units. A move on these lines will in effect drive the costs of JSPL’s raw material consumption to levels that make captive mining nearly uneconomical unless there is a direct rise in the sale price of their steel and electricity.
Secondly, government has clearly indicated its willingness to Auction the coal mines after they are cancelled by the SC. An auction in effect may create a spectrum like scenario ending up making the consumers bear the brunt of corporate and political rivals settling scores amongst themselves. Third yet equally important point is the tight control government is set to get on the future coal block allocations courtesy directions of the Supreme Court.
Subhash Chandra’s Zee News is having a ball by propagating miseries of Naveen Jindal’s business empire after the coal controversies. More pits are said to be under digging up process, as the CBI is rumored to be filing the Chargesheet in JSPL case in the run up to Haryana elections, as Naveen Jindal grapples between a SC Judgment and forthcoming assembly polls, leaving the field wide open for Subhash Chandra’s army to punch holes in.