New Delhi:
In the morning, the government's season of embarrassments got hotter with a leaked report that said 10.7 lakh crores had been wasted because coalfields had not been auctioned from 2004-09. By the evening, the government had recovered, mainly because the author of the draft report, the government's auditor, said it was nowhere near final and its content was, therefore, misleading.
Prime Minister Manmohan Singh who was confronted by an aggressive opposition this morning, said at night that there was no need for any explanation from him in parliament. The Comptroller and Auditor General (CAG), he said, had already made the required clarification.
The leaked CAG document finds that 155 coalfields were sold to about 100 companies and some state-run firms without competitive bidding. The auditor does not make accusations of corruption, but says the government extended "undue benefits" to the companies, and that the sale of the coalfields was "subjective" and allowed "windfall gains." (
Excerpts from coal scam report by Govt auditor (CAG) | (
Read: 10 big facts on this big controversy)
The Prime Minister oversaw the coal ministry for some of the period in question in the draft report. In Parliament, angry opposition leaders demanded an explanation from Dr Manmohan Singh, forcing several adjournments of both Houses.
By the afternoon, the Prime Minister's Office had released a letter from the Comptroller and Auditor General of India this afternoon. The letter allegedly states that "In the extant case the details being brought out were observations which are under discussion at a very preliminary stage and do not even constitute our pre-final draft and hence are exceedingly misleading...Pursuant to clarification provided by the Ministry in exit conferences held on 9.02.2012 and 9.03.2012, we have changed our thinking...In fact it is not even our case that the unintended benefit to the allottee is an equivalent loss to the exchequer. The leak of the initial draft causes great embarrassment as the Audit Report is still under preparation."
(Prime Minister's Office on CAG report on coal mining)Coal Minister Sriprakash Jaiswal said that the government had used advertisements in newspaper ads to invite offers for the coal fields in question. He also said that all state governments were consulted before the allocations were completed, and that BJP or Left-led governments in states like West Bengal and Rajasthan had expressed reservations about an auction. The government today said that the allotment of coal fields was done in a transparent manner and that, not a single block was allotted without the consent of the state governments. "The coal blocks are allocated through a screening committee which is chaired by Coal Secretary," he said. Before that, he explained, "We gave advertisements for allocation of coal blocks and invited applications...after the applications were received by us (Coal Ministry), the state governments were consulted and thereafter the coal blocks were allocated."
The opposition has seized this as evidence of the UPA's mismanagement. "The Congress-led UPA government is looting the country. We can't allow this to happen," said Prakash Javadekar, BJP spokesperson, as the party demanded a CBI probe into the alleged scam. The government, however, has managed to persuade the opposition to first debate and discuss important pending financial bills like the Union Budget; discussion on the coal controversy could follow in Parliament, it suggested. The Prime Minister took the lead in seeking cooperation - he walked up to the Left's Sitaram Yechury and others in the Rajya Sabha to make this point. It was repeated at an all-party meeting by the Lok Sabha Speaker, Meira Kumar.
The emphasis by the CAG in its draft report on an auction echoes the Supreme Court's recent order which said the government must use an auction to distribute all natural resources. That order came as the Supreme Court cancelled 122 telecom licenses that were sold, not through a bidding process, but to companies that were allegedly favoured in a distorted first-come-first-served process. In its draft report, the auditor says that the coal offered to firms was severely under-valued by the government and an auction of the coal-blocks would have helped ensure that the benefit of the low costs of coal production is passed on to the public.
India is the world's third-largest coal producer in the world after China and the United States. State-run power company, NTPC, said it had made no windfall profits from the allocations and that the lower costs meant cheaper electricity for consumers. The Indian subsidiary of ArcelorMittal and steel makers Tata and Jindal Steel and Power, are among the companies named in the report. Jindal's controlling shareholder, Naveen Jindal, who is also a member of parliament, defended the policy of direct allocations, saying it had allowed private companies to jump-start production at mines left idle by state-run Coal India Limited, the world's single largest producer.
(with inputs from Reuters)