Ministry delayed allocation mechanism

Ministry delayed allocation mechanism

Rapped by the Comptroller and Auditor General (CAG), Union Coal Minister Sriprakash Jaiswal on Friday said that the delay in adopting competitive bidding mechanism for coal allocation was because of different opinions given by Law Ministry and some state governments to the policy.

Jaiswal said after the concept competitive bidding was announced in 2004, it could not be brought into effect till 2010 (when it was passed by Parliament) because of the divergent views to formulate laws for the bidding system.

“Three different opinions were given by the Law Ministry to formulate laws for the bidding process during consultations at different stages. In such cases, it becomes difficult to proceed further,” Jaiswal told reporters.

The Union minister also sought to blame opposition shown by some of the state governments to the policy causing delay in adopting the bidding mechanism.

“The governments of Chhattisgarh, West Bengal and Rajasthan opposed the proposed bidding policy. They agreed only after we promised that we will give them all the revenue generated under the new process,” he said.

However, the minister refused to agree with the loss estimate given by the CAG pegging at Rs 1.10 lakh crore in the wake of delay in adopting the competitive mechanism. He stressed that previous coal allocation mechanism was not faulty and it was done in a transparent manner.

“We do not agree with the calculation method adopted by the CAG. The coal allocation was done by a screening committee, which comprised coal secretary and chief secretaries. Coal allocation was done by the best possible screening committee in a transparent manner,” Jaiswal exhorted. Of the 57 allocations found irregular by the CAG, only one coal block had become operational.

Jaiswal said that to ensure transparency, the government placed advertisements for the coal blocks that were available for allocation, and screening committee evaluated the companies which responded. 

The minister further asserted that private parties were involved in the development of coal blocks as the state-run firm Coal India was not able to meet the growing fuel needs of the country.

Jaiswal, however, stressed that “government will keep CAG suggestions in mind and will try to improvise the policy further”.

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