India Today

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

- By Devesh Kumar

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.

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 ??  ?? YASHWANT SINHA, BJP leader & former Union minister
YASHWANT SINHA, BJP leader & former Union minister

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