New Delhi: Naveen Jindal, a lawmaker belonging to India’s ruling Congress party, lobbied for exclusive allocation of a coal block to his company Jindal Steel and Power Ltd (JSPL) by writing to the Prime Minister.
To be sure, the letter was written in his private capacity and his company eventually didn’t get the mine he asked for and lobbying of the sort he indulged in is commonplace in India. The Prime Minister’s office forwarded his letter to the coal ministry for “appropriate action”.
Still, the correspondence sheds some light on how companies lobbied for coal blocks and while Mint isn’t aware of it, most other large companies allotted coal blocks might well have lobbied for them. “We used to receive hundreds of such recommendations. Every coal block used to see at least four-five MPs belonging to different political parties writing such letters,” said a former coal secretary who spoke on condition of anonymity.
According to documents reviewed by Mint, in July 2008, Jindal wrote in his capacity as executive vice-chairman and managing director of JSPL to T.K.A. Nair, then principal secretary to Prime Minister Manmohan Singh, for the “exclusive allocation” of the Urtan coking coal block. Following this, the Prime Minister’s Office wrote to the coal ministry on 9 July “that appropriate action may be taken in the matter and a report sent to this office on the relevant file”.
JSPL was not allocated the Urtan block, nor is the block mentioned by the Comptroller and Auditor General of India (CAG) in its report—Allocation of Coal blocks and augmentation of coal production—tabled in Parliament. Instead, the company and Monnet Ispat and Energy Ltd were together allocated the Urtan North block in Madhya Pradesh
JSPL has been one of the most successful companies in getting coal block allocations. It has got seven—Gare Palma IV/1 in Chhattisgarh; Utkal B1 in Orissa; Gare Palma IV/6 in Chhattisgarh; Jitpur in Jharkhand; Amarkonda Murgadangal in Jharkhand; the Ramchandi promotion block in Orissa and Urtan North in Madhya Pradesh. Of these, Amarkonda Murgadangal, Gare Palma IV/6 and Ramchandi are on CAG’s list.
The country’s top auditor has said that delays in the competitive bidding process may have resulted in “financial gains to the tune of `1.86 trillion” for private coal block allottees such as JSPL, Essar Power Ltd, Adani Power Ltd, JSW Steel Ltd, Monnet Ispat and Energy Ltd, Tata Steel Ltd, Cesc Ltd, GVK Power, ArcelorMittal India Ltd, Reliance Energy, GMR Energy Ltd and Lanco Group. Since June 2004, the coal ministry allocated 194 coal blocks on a nomination basis to various firms for captive use (till 31 March 2011).
Naveen Jindal did indeed write to the prime minister’s office asking for the Urtan block to be allocated to the company, a senior executive of JSPL said, requesting not to be identified.
“It is a normal thing. As the managing director of the company he has written this. It is not as if he is recommending anyone else’s case,” the official said. “And as a normal course of action, the head of the department (PMO) passed it on to the concerned department.”
“Anybody will write a letter to anybody in the government. Every company’s managing director will write,” he said.
“I have no idea,” the official said, when asked if Jindal secured the seven coal blocks of JSPL by writing more such letters.
The chief executive officer of a private sector power firm, who spoke on condition of anonymity, said, “This is how coal blocks were secured. Everyone lobbies.”
In his letter to Nair reviewed by Mint, Jindal wrote, “We understand that ministry of coal is planning to allot us Urtan North block jointly with another company... we have requested ministry of coal for allotment of Urtan block to our company exclusively. I would request you to please advise ministry of coal so that Urtan block is exclusively allocated to our company.”
The Prime Minister’s Office said it would only be able to revert on the matter on Friday.
Mint reported on 18 March 2008, that there were significant irregularities in the Union government’s award of mining rights for 15 coal blocks with reserves worth around `5.37 trillion to 31 companies. Nine of the 31 companies were awarded rights despite being rejected in earlier stages of the bidding process for not meeting the government’s prescribed criteria. Also, the government overruled a recommendation to restrict the number of companies awarded rights at 28. Six of the companies shortlisted after meeting all the prescribed criteria were dropped.
The Central Bureau of Investigation has already initiated an investigation into alleged irregularities in the allocation and utilization of coal mines by private companies.
The probe could compound the political problems facing the Congress-led United Progressive Alliance (UPA) government, which has been mired in a series of corruption charges and controversies, including the allotment of second-generation (2G) telecom spectrum.