Coal Scam Tars Prime Minister
How Manmohan Singh’s CAG report exposes the Prime Minister’s role in discretionary allocation of coal blocks but stops short of naming him
CAG report exposes the Prime Minister’s role in discretionary allocation of coal blocks but stops short of naming him.
July 16, 2004
Coal secretary P. C. Parakh recommends competitive bidding to Minister of State ( Coal and Mines) Dasari Narayana Rao.
February 19, 2009
Standing committee clears the Bill.
September, 2009
By then 142 blocks already allotted, 57 to private players
August 2010
Bill passed by
Parliament.
September 11, 2004
PMO circulates a note listing flaws in competitive bidding, with delay in block allocation for captive mining being a prominent one.
October 31, 2008
MMDR Bill referred to the standing committee.
February 2, 2012
Amendment to MMDR Act notified. Allocation to private players now only via auction. But the same could have been done earlier by ordinance, to prevent arbitrary allocation. The PMO headed by him consistently thwarted efforts to introduce competitive bidding in the allotment of coal blocks for captive mining.
The CAG says the coal ministry’s refusal to take the auction route caused a loss of Rs 1.86 lakh crore to the exchequer. Beneficiaries of the largesse include JSPL, Tata Steel, Tata Power, Tata Sponge, JSW Steel Ltd, Essar Power Generation, Adani Power, and Jindal Steel and Power Ltd. The irony is that only one block, Electrosteel Castings Limited in Jharkhand, has become operational till now, the report notes. The Prime Minister Manmohan Singh has run out of cover. The Comptroller and Auditor General’s ( CAG) report, tabled in Parliament on August 17, has shown that 57 coal blocks were awarded to private players in a discretionary, nontransparent manner, ignoring the coal ministry’s advice to tap transparent bidding process, like auctions. And for much of the period when the allotments were made, Manmohan himself headed the coal ministry. Not just that. CBI, which had been asked by the CVC to submit its report on the probe into irregularities in the allocation of coal blocks by September 1, is expected to seek extra time.
The report has brought most of the Opposition together, with non- NDA parties like the Left, BJD and AIADMK making common cause with BJP and its allies. The report cast a shadow on the functioning of Parliament with the opposition seeking Prime Minister’s resignation and the government refusing to accede to the demand. The deadlock paralysed proceedings of
competitive mining, there is a windfall gain to the person who is allotted a captive block...” Auctioning of coal blocks, under such circumstances, was considered by the coal ministry to be the best way out, as it was “transparent and objective”. It would also earn the Government more money.
Manmohan consistently stonewalled efforts of the coal ministry to move to competitive bidding. Here’s how:
September 11, 2004 The PMO drafted a note listing demerits of the auction route. Junior minister Dasari Narayana Rao specifically observed that the competitive bidding proposal may not be pursued any further, “as it would invite further delay in the allocation of coal blocks, considering that the Coal Mines ( Nationalisation) Amendment Bill, 2000, envisaging competitive bidding as a selection process for allocation of coal blocks for commercial purposes, was pending in the Rajya Sabha”.
“We are seeking Singh’s resignation because he was not just the PM, but also the minister in charge of coal when the coal blocks were allocated.”
October 2004 The PMO reiterated its opposition to the policy of allocating coal blocks through competitive bidding. This becomes clear from the coal secretary’s note. “The policy… was discussed in the PMO, and it was felt that since a number of applicants ( had) requested for allotment of coal blocks based on the current policy, it would not be appropriate to change the allotment policy through competitive bidding, in respect of applications received on the basis of the existing policy,’’ points out the coal secretary.
April 7, 2006 The PMO, after a meet- ing held with representatives of various stakeholding ministries, directed the mines ministry to amend the MMDR Act, 1957, so that competitive bidding could be extended to all minerals. An administrative order, bringing in competitive bidding, could have hastened the process. However, Manmohan’s PMO thought otherwise. The Department of Legal Affairs, in its opinion to the coal ministry on July 28, 2006, left it to the Government to usher in competitive bidding by taking recourse to either the easier and faster route of an administrative order, or the legislative route. The PMO, it now transpires, opted for amending the MMDR Act.
July 2006 As per advice of the Department of Legal Affairs, competitive bidding could have been introduced. However, coal ministry under PMO’S direction disregarded the opinion, and continued to allocate coal blocks via the discretionary route.
October 17, 2008 The bill to bring changes in the law was introduced in Parliament, and after a long and tortuous route, was passed by the House in August 2010. The amendment, for inexplicable reasons, could only be notified two years later.
The Government’s offer to have a discussion on the CAG report on the floor of both houses of Parliament, as well as referring it to the Public Accounts Committee ( PAC) for vetting, was rejected outright by the Opposition. “Why is the Opposition running away from a discussion in Parliament? If you hold a debate, facts will come out. Let the report also be examined by the PAC,’’ argues Congress spokesman Manish Tewari.
“From the first day, the Opposition has sought the Prime Minister’s resignation on one pretext or another. This can’t go on,’’ adds Rajiv Shukla, MOS for parliamentary affairs.
“We’re aware that the CAG report is first presented in Parliament, and then to the PAC. Surely, you’re aware of the fate of the CAG report on the 2G scam? The PAC spent a year examining the CAG report and taking evidence, and when its report was ready for adoption, Congress members torpedoed it. It wasn’t even allowed to be presented in Parliament,’’ counters Sinha.