Tuesday, May 21, 2013

Coal Scam: Govt abused powers in coal block allotments: Panel

New Delhi: Parliament’s Standing Committee on Coal and Steel has indicted the government for “totally abusing its powers” in allotting coal mines between 1993 and 2010 through the “most non-transparent procedure” to “few fortunate ones for their own benefit”.

“The government cannot give largesse on its arbitrary discretion or its sweet will,” the committee, under the chairmanship of Trinamool Congress MP Kalyan Banerjee, said in its latest report tabled in the Lok Sabha on Tuesday. The report recommended that allotment of all blocks, where production was yet to start should be scrapped on the ground that the “entire procedure was unauthorized” and “no one should be allowed to enjoy the benefit of illegal auctions”.

ToI had on Tuesday first reported the panel’s recommendations declaring the allocations ‘unauthorized” and seeking their cancellation.

Addressing reporters after tabling the report in the Lower House, Banerjee described the allocations as a “betrayal of the nation”. He also ruled out any role of his party chief and West Bengal CM Mamata Banerjee when she was the coal minister in the NDA government. “Every coal minister is not party to the allocation process.”

Raising the pitch on crony capitalism through subsequent regimes, the report rejected the government’s contention that the Screening Committee — with representative of the coal, state where a mine being allotted was located and the administrative ministry of the industry for which a mine was being allotted — acted fairly while distributing blocks between 2004 and 2009.

“Coal block allottees failed to start production so far which raises apprehension that they were considered without taking into account the techno-economic feasibility of the enduse projects, past track record, of the developers in execution of projects and their technical and financial capabilities,” the report said adding that only 30 out of 218 blocks allotted have gone into production.

The report pointed out a bias in favour of the private sector to bolster its argument. Sector-wise allocations show that out of a total of 81 blocks allocated to power sector, 27 were ultra-mega power projects and 42 to government entities.

Similarly for steel sector, only two blocks were allotted to state-run companies against 61 blocks to private entities. This “shows” that the allocation process was biased in favour of the private sector.

Pointing out loss to Central exchequer in the absence of bidding, the report said since “coal block allottees are required to pay royalty on production to state governments, non-development of the blocks will mean a big loss (also) to the state exchequer”. The report did not quantify the loss, saying no information was made available either on the quantity or value of the mined coal. Last year, the federal auditor had said that the government extended windfall gains of Rs 1.86 lakh crore to private entities by allotting blocks to them without bidding.

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