Coal secretary warned of irregularities in allocation

The Centre could have avoided the wrath of Opposition regarding the alleged irregularities in coal block allocation had it adhered to the erstwhile Coal secretary P C Parakh’s advice on allocation of coal blocks through competitive bidding.

Soon after the government announced in June 2004 that coal blocks will be allocated through open tendering, Parakh had warned that private companies are making windfall profits because of the “ways of allocation.”

The CAG report admitted that delay in implementation of competitive bidding inflicted a loss of Rs 1.86 lakh crore. The audit report states that the PMO, on September 11, 2004, had “initiated a note detailing certain disadvantages of allocation of coal blocks through competitive bidding.”

However, Parakh stood by his observation. In a response dated September 25, 2004 he emphasised on how people with vested interest try to influence the screening committee’s decision making. He also suggested that the pending applications be processed through competitive bidding.

The CAG report also said the erstwhile minister of state for coal, Dasari Narayan Rao hindered introduction of a transparent bidding mechanism.