x Abu Dhabi, UAEWednesday 24 January 2018

Power struggle ignites India's coal wars

A shooting at a wedding reception 17 months ago left a wealthy coal trader dead and focused attention on an industry that provides more than half India's power, yet is also rife with cronyism, union manipulation and corruption.

Sanjeev Singh, scion of the Singh Mansion, a dynasty of union leaders and coal traders, poses in front of a portrait of his father in October, 2012.
Sanjeev Singh, scion of the Singh Mansion, a dynasty of union leaders and coal traders, poses in front of a portrait of his father in October, 2012.

DHANBAD // Seven shots rang out at a wedding reception in this sooty city in eastern India, and Suresh Singh, India's "Coal King", fell fatally wounded.

He was a wealthy coal trader, a politician and, police say, a crime boss. At the time of the shooting, Singh had 14 criminal charges against him, including one for homicide. His career and murder are emblematic of one of India's most nagging economic problems: the corruption that cripples the crucial coal industry.

The shooting was the latest gangland killing between rival coal clans, both with the surname Singh.

They have fought for years to control rackets that prey upon the coal industry in Jharkhand, home to some of the nation's biggest mines.

The rackets include controlling unions and transport, manipulating coal auctions, extortion, bribery and outright theft of coal.

Popularly known as the "coal mafia", their tentacles reach into state-run Coal India, the world's largest coal miner, its chairman said.

Widespread plunder in coal country contributes substantially to chronic shortages of a commodity that fuels the generation of more than half the country's power.

It is a murky subculture that entwines the coal mafia, police, poor villagers, politicians, unions and Coal India officials. Coal workers pay a cut to crime bosses to join their unions, which control access to jobs, according to law-enforcement and industry officials.

Unions demand a "goon tax" from buyers, a fixed fee per tonne, before loading their coal. Buyers must bribe mining companies to get decent-quality coal. The mafia pays off company officials, police, politicians and bureaucrats to mine or transport coal illegally.

In a startling admission, the chairman of Coal India, S Narsing Rao, said he knows some of his officials are involved in stealing coal but his company cannot control what happens once lorries leave the mine gate.

"Obviously it happens with the connivance of our own guys, in collusion with our own guys," he said.

Mr Rao estimated the scams cost VCoal India, which has a near monopoly, about 5 per cent of its 450 million-tonne annual output. Police officials in Jharkhand said the real figure is between a fifth and half of the production at some mines.

Corruption, crime and waste exert a heavy toll on the economy. Recently built power stations stand idle across India, mainly for lack of coal. Last July, the world's most severe blackout shut off power in half of India, home to 1.2 billion people.

Power companies are increasingly turning to imports as domestic output lags behind demand. Yet India sits on the world's fifth-largest coal reserves, which the government says could supply the nation's energy needs for decades. Coal imports have tripled in 10 years to about US$1.5 billion (Dh5.5bn) a year. The International Energy Agency expects imports to rise faster in India than anywhere else, as consumption is predicted to overtake that of the United States by 2017.

National political leaders promise action - but at the same time throw up their hands.

The coal minister, Sriprakash Jaiswal, said that the Central Bureau of Investigation was taking a larger role in tackling the mafia, but emphasised it was mainly up to state governments to tackle crime.

"There is no doubt that coal mafias are active. We accept that coal theft happens. But law and order are state subjects," Mr Jaiswal said. "I won't say that the state governments do not cooperate. But the system there is so weak, policing is weak."

Singh Mansion

Suresh Singh seemed relaxed at the wedding party of a local hotelier's son on December 8, 2011, police and a witness said. His bodyguards were unarmed.

A high-school dropout with a long police record, Singh, 48, thought the old gang ways were becoming outdated in the "Shining India" of today, a source close to the family said. He had even sent his son to England to study banking.

After the bullets flew, Singh's bodyguards drove him to a hospital, where he died 30 minutes later. His father filed a police report saying that his son, in a deathbed declaration, had named three people responsible for the attack - Sashi, Sanjeev and Ramadhir Singh, from a rival family known as "Singh Mansion".

Eleven witnesses also named Sashi Singh as the shooter.

"The moment Suresh got up to leave the party, Sashi stood up, walked towards him and shot him seven times," said Ravi Thakur, the police officer in charge of the investigation.

The victim and his alleged attackers were rivals in business and local politics. Suresh Singh was twice an unsuccessful candidate for India's ruling Congress party in elections marred by violence. The mother of the accused gunman, Sashi Singh, is the mayor of Dhanbad. Sashi Singh is still at large, having fled across state lines, police said. No charges have been filed against the other accused individuals.

Police have differing versions of why Sashi Singh would have shot Suresh Singh. Mr Thakur says he is investigating the case as a premeditated shooting, either in revenge for a previous murder or over their conflicting business interests. Another police officer and people in Dhanbad say an insult was the trigger.

Sashi Singh's cousin, Sanjeev Singh, the young heir to the Singh Mansion dynasty, is also a named suspect in the murder, although he was not at the wedding. He was in hiding for months before returning to Dhanbad in September. Now he rides the streets of the coal capital with 20 men and an armed police escort in a convoy of white 4x4s.

"Today, Suresh is not here, but it doesn't mean I don't have any more rivals who wish to kill me," Sanjeev Singh said.

At the orange-walled mansion in Dhanbad that gave the family business its name, Sanjeev Singh denied that he or his family were involved in Suresh Singh's murder. But he spoke extensively about their feud.

Sanjeev Singh's father started Singh Mansion in the early 1970s, having risen from coal worker to union boss and state legislator. He counted the late prime minister Chandra Shekhar, who once spent a weekend at the mansion, as a friend.

The father's power and business were based on the labour union he controlled and which remains a bastion of the Singh Mansion enterprise. It is empowered to bargain collectively for workers at Bharat Coking Coal Limited (BCCL), a Coal India subsidiary. Police say Singh Mansion uses the union to extract bribes from coal transporters.

The feud began in the 1990s, when Suresh Singh began to compete with Singh Mansion at coal auctions, Sanjeev Singh said. The auctions are a key focus for crime syndicates, police say. Mafia-controlled unions will sometimes refuse to load coal bought by anyone else. That usually ensures the syndicates are the only bidders and keeps auction prices low.

The union controlled by Singh Mansion, Janta Mazdoor Sangh, has long exerted influence over BCCL officials, who allow Singh Mansion to run rackets that include the theft of coal to sell on the black market and controlling lorries that leave the mines. Sanjeev Singh, who is the general secretary of the union, denied the union was involved in anything illegal.

BCCL's chairman, TK Lahiry, said it is true that when he took over the company four years ago, Singh Mansion's influence was huge. "Singh Mansion [had] entire command and control" over a major area in BCCL's operations, he said. "All sorts of antisocial activities were going through that particular office."

He said he shut down the area office and transferred dozens of influential officials suspected of working for Singh Mansion. BCCL as a whole is making a profit now after years in the red, he said, but added that only the police could put an end to the coal rackets.

Political protection

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 for weapons by day and, using a network of informants, conducted raids on illegal truckloads of coal at night.

She filed cases against Singh Mansion members, including charges of extorting coal merchants, but said she was unable to stamp out a system that involved politicians and mining officials. She was transferred 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 couldn't take any action against them, because they're politically well connected. They have financial power," Ms Gupta said at her new posting in the city of Hazaribagh, which also lies in the coal belt.

She said that over the decades, Singh Mansion built close ties to officials at BCCL, the Coal India subsidiary, who provided 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 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," Ms Gupta said. "There are many things they are supposed to do, but they are not doing it."

The new mafia

Walls in and around Dhanbad feature a new scrawled slogan that is shaking up the old mafia order: "Long live Dhulu Mahto".

Like the founder of Singh Mansion, Mr Mahto is a state legislator from humble beginnings - first as a coal worker and then union boss. He is the champion of a new class of rootless labour who do not work for the big coal companies. Their ranks have grown as the coal companies lease out their pits to private companies who employ contract workers.

People in Dhanbad call him "new mafia". His influence covers mines responsible for a third of BCCL's output, a senior BCCL official in the area said. Some mines would produce at least 10 per cent more coal if Mr 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 the source of Mr Mahto's wealth, which the suit estimated at 2 billion rupees (Dh135 million).

Mr 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 among supporters at his mansion overlooking an abandoned pit outside Dhanbad. "We just want to serve."