Windfall for private players in coal block scam

CAG report says companies made Rs 1.86 lakh crore; silent on PM

The controversy over coal block allocation is likely to give nightmares to a few private players in the sector after a news channel reported that some leading companies made profits to the tune of Rs 1.86 lakh crore owing to the alleged irregularities.

Claiming to have accessed a Comptroller and Auditor General (CAG) report on coal block allocation that is likely to be tabled in Parliament next week, CNN-IBN named the Tata, Naveen Jindal, Essar, Abhijeet, Arcelor and Vedanta groups as the beneficiaries.

However, the report was silent on the role of Prime Minister Manmohan Singh, who held the coal portfolio between 2006 and 2009 and the state governments.  

Besides, allocation of captive coal mines between 2004 and 2006 was not transparent and a six year delay in allotting blocks through competitive bidding caused huge losses to the exchequer, the channel said, quoting the report.

The CAG report may trigger another round uproar by the opposition parties, who have already demanded the prime minister’s resignation for the alleged irregularities in coal block allocation.

Though the CAG had suggested introduction of competitive bidding in 2004, rules for auction was framed only in 2012.

Between 2004 and 2006, a high level committee constituted by the Coal Ministry had allotted coal blocks to 181 government and private companies, it was alleged. A total of 15 blocks allotted to private players did not even start production till March 2011, while some of them sold the blocks at astronomical prices, the report said. 

The Central Bureau of Investigation (CBI), which is investigating the scam, has also sought the information regarding the allocation from the power and steel ministries and public sector units. However, the Coal Ministry maintained that the allocation was equitable and fair.

The Ministry even told the CBI that allocation of coal blocks was never considered a potential source of revenue. Instead, the government intended to accelerate infrastructure development, essential for maintaining high growth trajectory of the country’s economy.