Coal block controversy: A news round-up

Coal block controversy: A news round-up

12 September, 2012

Moneycontrol.com reported late on Tuesday evening that the coal controller report had recommended that the inter-ministerial group to deallocate the block given to Jindal Steel and Power Ltd (JSPL).

“The coal controller report accessed by CNN-IBN covers as many as 18 companies and will give its final recommendations to the coal minister by 15 September. In its report, the CCO (Coal Controller Organisation) has also recommended extension of deadline for many companies as clearances are delayed, while 18 coal block firms are likely to lose their bank guarantees.The coal controller report recommends the IMG to deallocate coal blocks to Jindal Steel and Bhushan Steel," the report said.

SKS Ispat, with links to Union minister Subodh Kant Sahai, invested only 55 crore against a project cost of 500 crore. According to the coal controller report, there is no office or other infrastructure.

According to the report, Jayaswal Neco, owned by Manoj Jayaswal, which was raided by the Central Bureau of Investigation last week, has invested only 34 crore against a project cost of 130 crore.

Naveen Jindal’s cousin Sajjan Jindal’s company JSW has invested only 60 crore against a total project cost of 396 crore. The report also says the Odisha project has not started production. The recommendation is to deduct bank guarantee of 56 crore.

The coal controller’s recommendations will be taken into account by the inter-ministerial panel along with the responses by the companies. The panel is set to meet on Wednesday and is likely to submit its report to the Prime Minister’s Office by 15 September.

Interestingly, Mintreported that JSPL, a part of the $12 billion OP Jindal Group, had cornered 6% of coal reserves doled out.

“Between 1996 and 2009, JSPL and its unit Jindal Power Ltd were allotted nine coal fields in the mineral-rich states of Orissa, Chhattisgarh, Madhya Pradesh and Jharkhand, translating into reserves of 2.59 billion tonnes, or 5.97% of the 43.35 billion tonnes doled out by the Centre. Since 1993, 195 coal leases were handed to 289 companies (several in consortium)," the report said.

“The coal blocks allocated to JSPL on its own and as part of a partnership were Gare Palma IV/1 (1996), Gare Palma IV/2 (1998), Gare Palma IV/3 (1998), Gare Palma IV/6 (2006) in Chhattisgarh, Utkal B-I (2003), Ramchandi Promotional (2009), Urtan North (2009) in Orissa, and Jitpur (2007) and Amarkonda Murgadangal (2008) in Jharkhand," it added.

“JSPL’s non-producing blocks Jitpur and Amarkonda Murgadangal in Jharkhand, Gare Palma IV/6 in Chhattisgarh and the coal-to-liquid block Ramchandi Promotional in Orissa have been named by the CAG," the report further said.

Meanwhile, S. Narsingh Rao, chairman of Coal India Ltd (CIL), has said that coal benefits should be for the people. In an interview published in Mint, he said that the government “thought, keeping in mind CIL’s limitations, that it should not depend on CIL alone for mining coal and that it should allow supplementary efforts to shore up coal production".

“That’s why coal blocks were allotted for captive purposes both to public and private sector companies. Some of the blocks were taken from CIL as well—those from which CIL didn’t propose to produce any coal until the end of the 11th Five-Year Plan (2007-12), he added.

The Samajwadi Party has said that the coal block allocation fiasco is a “bigger scam" than the 2G telecom scam.

“When the entire truth comes out, people will be surprised that it is a much bigger scam than 2G scam... The Prime Minister should take initiative in ordering a probe and cancel all coal block allocations," the PTI news agency quoted party general secretary Ram Gopal Yadav as saying, according to a rpeort published by The Times of India.

“The SP’s stand on coal issue on the eve of its two-day national executive in Kolkata assumes significance as the party leadership is likely to spell out its strategy for the 2014 Lok Sabha election and its relationship with Congress," the PTI report said.

11 September, 2012

Coal minister Shriprakash Jaiswal on Tuesday denied allegations by the Samajwadi Party and the Bharatiya Janata Party that some blocks had been allocated during his tenure as coal minister. Speaking at a press conference in Lucknow, Jaiswal said that no coal blocks were allocated during the UPA-2 regime. He said that since 1993, 195 blocks had been allocated and that the entire information was available in public domain.

When asked whether he was related to Manoj Jayaswal of the Abhijeet Group, he asked that when he “had not allocated any coal block as coal minister, then how does it matter?"

“If someone has any proof that I influenced allocations as minister of state of home, then he must present the proof," he said.

“PM wanted to speed up the industrialization process of the country and hence the allocations of coal blocks," Zee news channel quoted him as saying.

Earlier in the day, Zee News said that Samajwadi Party leader Ram Gopal Yadav on Tuesday had accused Jaiswal of serious irregularities in the allocation of coal blocks after he took charge of the coal ministry.

Speaking to Zee News, Yadav said, “Shriprakash Jaiswal cleared allocation of three coal blocks with one hour and seven minutes of taking charge as Union coal minister." Jaiswal took charge of the ministry on 19 January 2011.

At a time when the controversy surrounding allocation of coal blocks is making headlines, Coal minister Shriprakash Jaiswal has admitted that there is no possibility of coal production going up in the near future. In an interview published in Business Today magazine, the minister further said that he did not accept the premise of the Comptroller and Auditor General (CAG) for calculating the loss figure.

“Coal India will increase production by 7 per cent this fiscal. There is no possibility of production going up substantially in the near future as the public sector company is facing many problems," he said

“I do not accept the premise of the CAG. The comparison of mines belonging to CIL with that of the allocated (captive) coalmines is not appropriate. The geo-mining conditions of the allocated mines vary. Coal may be available at 100 feet in one mine while in another it may be 500 feet. Besides, some mines are in the interiors or tense (Naxal) areas. On the other hand, the mines that CIL operates are in easy areas," Jaiswal told the magazine.

Meanwhile, The Times of India has made a comparative analysis of how mining corporations owned by state governments have actually fared better than Coal India Ltd in signing lucrative deals with private companies to develop coal blocks allocated to them.

“It’s strange but true. The state mining corporations (SMCs) of Maharashtra, Madhya Pradesh, Chhattisgarh, and the Tamil Nadu Electricity Board (TNEB) easily landed lucrative deals with private partners to produce coal in mines allotted by the ministry," the report said.

“The SMCs of Maharashtra (4 blocks), MP (6), Chhattisgarh (3) and TNEB (1) auctioned their blocks even though the ministry of coal has been shouting through the rooftops that rules do not permit it. In what cannot be a mere coincidence, the model of agreement for all was the same," the report further noted.

“Several private companies, some of which had blocks directly allotted by the ministry too, made a beeline to join hands with the state-owned companies. The SMCs and TNEB formed joint ventures (JV) with the highest bidding parties and kept 51% stake to themselves," it said.

In a separate report, The Times of India said the “continuation of tourism minister Subodh Kant Sahai and coal minister Sriprakash Jaiswal looks uncertain, with the Congress leadership considering strong measures to contain the fallout from the (coal allocation) scam."

The newspaper said that although the Congress leadership “continues to resist the allegation of a scam" the party thinks that the continuation of Sahai and Jaiswal in office would be politically untenable.

“The Congress leadership seems to realize that the involvement of party members in the controversial allocation of coal blocks has thickened the perception of collusion between the government and the allottees of blocks, handing opposition a stick to beat it with," the report said.

In another report, The Times of India said that the union coal ministry actually sent a notice to a Nagpur based company a few months back as it thought the company was “profiteering" even though the ministry now maintains that no one profited from the way it allocated coal blocks.

“Despite some other firms too having passed on their block to a third party for a premium, the ministry sent a notice to only one company—Topworth Urja and Metals Ltd. Ironically, it is the buyer who got the notice and not the original promoters of Shree Veerangana Steels Ltd, from which the coal block was transferred to the latter. Shree Veerangana is promoted by former president of Vidarbha Industries Association(VIA) Mohan Agrawal," the report said.

“However, even though it objected to “profiteering" by this company, it took no other action beyond sending the notice. Even this came six years after the company had transferred the block to another for windfall gains," the newspaper noted.

“Sources said this was not the lone case of profiteering by selling stake. B S Ispat Ltd and Gondwana Ispat Ltd, both the companies which had Agrawal and Govind Daga, another prominent city businessman, as partners have transferred the coal blocks to a third party. However, this time they used a smart move. Instead of transferring the assets to a different company, the promoters simply sold their entire stake to Orissa-based OCL Iron and Steel Company," the report further said.

In what could queer the pitch for companies that were allotted captive coal mines by the Atal Bihari Vajpayee-led government, the Public Accounts Committee (PAC) looking into the allocations could call government officials who were involved in allotting blocks at that time.

“Senior PAC members believe, besides former coal secretaries during UPA-I (United Progressive Alliance-I), those during the National Democratic Alliance (NDA) rule should also be called to find out about the policy decisions during the Atal Bihari Vajpayee government," the Business Standard newspaper said in a front page report on Tuesday.

“PAC may also call members of the screening committee who were part of the allocation process, to know how many times they had met before deciding on the allocation of coal blocks to private companies. The BJP had alleged the committee had not met after mid-2008, but the Union government continued to allocate coal blocks to benefit some," the newspaper report added.

In another report, The Times of India said that between 2006 and 2010, government owned NTPC Ltd “awarded a coal mine contract worth over 23,000 crore to a joint venture company in which 10% shares are held by the family of former coal minister Santosh Bagrodia."

“Significant parts of the tender for awarding Pakri-Barwadih (PB) coal block took place when Bagrodia was minister of state for coal in the UPA government. The company which lost out in the race for the contract was another PSU, Singareni Collieries Co. Ltd, that reported directly to Bagrodia," the newspaper report added.

Bagrodia however denied any involvement, according to the paper.

Meanwhile, The Economic Times newspaper said Monday that 10 of the 29 coal blocks that are on the radar of the inter-ministerial group, could be taken back, “as their owners have not been able to do much to develop them for years, and have not put up a strong case to convince the panel of officials scrutinizing the allocations."

“The government had issued show-cause notices to companies, including state firms, not doing enough to develop the blocks. The notices show that in 15 blocks, the owners had met almost no milestone for development for two to five years. Many were stuck because they were waiting for government clearances. About 11 companies have delayed their application for forest and environment clearance as well as application for mine-opening permission by anything between two years and 12 years," the report said.

The Central Bureau of Investigation (CBI) has shortlisted companies and officials it would question in the coal block allocation issue, the Press Trust of India (PTI) reported Monday.

“Agency sources said in the first batch, the accused named in the FIRs against JLD Yavatmal Energy Ltd, JAS Infrastructure Capital Pvt. Ltd and AMR Iron and Steel Pvt. Ltd are likely to be called at its headquarters in Delhi for examination," the PTI report that was published by the DNA newspaper said.

“CBI sources said the officials of screening committee in which the coal blocks were cleared and officials who screened the applications would also be asked to record their statements in connection with the probe. They said the teams which had gone for raid have collected documents, laptops, hard drives from various locations and were scrutinizing the details from them.

Meanwhile, The Times of India said in a report that several opposition leaders attacked Congress member of parliament Naveen Jindal, who promotes Jindal Steel and Power Ltd, which has been under the scanner on the coal block allocation issue.

“We are against captive coal allocation. Jindal is the biggest allottee. The policy was uncalled for. The companies got cheap coal blocks and sold power dearly. We demand cancellation of all coal blocks," the news report cited CPM general secretary Prakash Karat as saying.

Parties belonging to the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) also came down heavily on the company, “marking a rare Left-Right tandem on an issue", the report added.

Jindal however denied the allegations that his company was unduly favoured. In a report, CNN-IBN news channel cited Jindal as saying that the government had invited 28 companies, of which only two had the experience to convert coal to liquid fuel and that, “his company had the best credentials."

“We were not squatting on the coal blocks. Mining is a tough business to start," the channel quoted Jindal as saying.

On Monday, the coal ministry said that it had sought details of coalfields from allottees. The inter-ministerial group (IMG) that’s looking into the controversial allocations and whether they should be cancelled has asked the companies to furnish documents certified by authorized officials indicating the current status of their projects, Mint said in a report.

The coal ministry has also asked the companies to submit details of actual investments made vis-à-vis what was originally planned when the companies had set out to develop the coal blocks. The government also wants to know how much each company wants to invest in the final power, steel or cement plant that is it developing, the report added.

The Wall Street Journal (WSJ) said on Monday that the coal controversy had “created a new obstacle to the beleaguered government’s agenda."

“The paralysis in government has hurt Congress’s popularity, according to a recent poll. A recent NDTV-Ipsos poll surveying 103 seats of the country’s 543 seats in the Lower House of Parliament showed the governing coalition’s tally would plummet to 20 seats if an election were held today, fewer than half the 52 it currently holds in those districts," the WSJ report said.

“The BJP’s stalling of Parliament hasn’t done much for that party, which along with its allies could see its tally rise to 33 from 26, the poll found. An array of smaller, regional parties—like those Congress allies who have hobbled economic overhauls—could be the winners, leading to further political fragmentation and a less decisive government," the report cited analysts as saying.

10 September, 2012

In a release issued Monday afternoon, the Union coal ministry said that the inter-ministerial group looking into the coal block allocations will meet at 3 pm on 12 September to deliberate and finalise its recommendations regarding allotees/companies that made presentations before it.

The presentations were made by the allotees of 29 coal blocks after show- cause notices were issued to them, the release said.

Meanwhile, Union law minister Salman Khurshid on Monday sought to again defend the government on the issue of coal block allocations.

At a press conference on Monday, Khurshid said that all allocations were as per the procedure adopted by the screening committee and that the Prime Minister had “nothing to do" with the procedure that the screening committee adopted for allocating coal blocks.

He said that there was no delay in the procedure being adopted to auction the blocks. “The question is if during the time taken for deciding on auction, if we should have stopped allocating coal. However we felt supply should be uninterrupted, because of rising demand. We continued under the screening committee," Firstpost quoted Khurshid as saying.

He said that Orissa chief minister Naveen Patnaik personally retested allocation of coal block to Jindal and that none of the the chief ministers disagreed with the govt process.

“Of the 57 blocks referred to in the CAG report, 20 of those blocks are for the power sector. As far as these are concerned, they cannot be auctioned because there is a tariff through competitive bidding," NDTV quoted him as saying.

In an interesting story, DNA newspaper reported Monday that the Manoj Jayaswal-controlled Abhijeet Group, which is in the eye of the storm over coal block allocations, got loans worth Rs22,000 crore to develop power projects.

“His group leveraged the free booty by proposing power projects and got Rs22,000 crore of loans sanctioned from various banks. Of this, Rs11,000 crore has been disbursed with no project near commissioning, and that could be the beginning of bigger problems for lenders," the report said. “Monthly interest payments along with salary and administrative expenses run into huge sums, between Rs100 crore and Rs110 crore, for the Abhijeet group."

“According to a former employee, in 2008, Abhijeet Group had only three active projects—Corporate Ispat Alloys (CIAL), which ran a 36 MVA ferro alloy plant in Durgapur and had a topline of Rs298 crore and bottomline of Rs13 crore in 2008-09; Jas Toll Road Company, which operated a 32km section of NH-4 between Neelamangla and Tumkur near Bangalore in which Abhijeet Group divested 33% to IDFC for Rs65 crore; and a bridge toll project operated in Bhandara, called Ashoka Infrastructure, which had a daily collection of Rs2.5-3 lakh and where Abhijeet Group owned just 50% stake," the report further noted.

Even as the inter-ministerial group looking into coal block allocations looks set to submit its report, a missive by the department of economic affairs (DEA) in the finance ministry could make revoking allocations tougher.

The Economic Times newspaper said Monday that last week the DEA had told the panel that “any recommendation to de-allocate blocks should take into account views of the ‘end-user ministry’ as well as financial implications."

“The concern expressed by the DEA could potentially increase the complexity of the IMG’s task as the coal ministry is determined to abide by a 15 September deadline set by the Prime Minister’s Office to act against companies that have not done much to develop mines," the report said.

The Business Standard newspaper said minutes of several government meetings at the time of allocations, reviewed by it, showed that disagreements between various ministries had led to “hasty vetting of coal applicants’ credentials".

“The deliberations show the buck was passed when it came to checking the authenticity of the details provided by companies and finally a quick verification was done by the state governments," the report said, citing government documents.

Meanwhile, Mint reported on Monday that the government allotted blocks for coal-to-liquid (CTL) projects proposed by Jindal Synfuels Ltd (JSFL) and Strategic Energy Technology Systems Pvt. Ltd (SETSPL) based on the recommendations of an inter-ministerial group (IMG) led by Kirit S. Parikh, who was then member, energy, at the Planning Commission.

9 September, 2012

The Central Bureau of Investigation (CBI) could soon name officials of the Union coal and power ministries and officials of state governments, who it believes were directly complicit in the fraudulent allotment of coal blocks.

The Hindu newspaper, citing highly placed unnamed government officials, said that CBI could name officials involved in the allotments in the next round of first information reports, that the agency will file soon.

“Highly-placed government sources said the next round of FIRs to be lodged by the CBI could actually name the officials who were part and parcel of this conspiracy and had joined hands to suppress facts pertaining to these companies, their standing, holdings and financial transactions. Certain officials of the Screening Committee, the Coal Ministry, the Ministry of Power and other administrative machinery deliberately overlooked the misrepresentation of facts by the tainted companies, they added," the report said citing officials.

“ “Enquiry also revealed that officials of the Ministry of Coal, in pursuance of the criminal conspiracy, failed to carry out scrutiny of the aforesaid documents regarding the false claims/concealment of facts by JLD Yavatmal Energy Ltd for which the company got undue advantage in allocation of the Fatehpur East coal blocks," the FIR filed by CBI on September 3 states," the report further said.

On Sunday, The Economic Times ran a story analysing how corruption in the coal sector “extends beyond" the present controversy surrounding the allocation of coal blocks.

The report details how inefficiencies the government owned Coal India Ltd (CIL), the world’s largest coal miner have kept the coal sector back.

“Firstly, it had problems in ramping up production from new blocks because of a lack of rail linkages. The rail links needed to ship coal from these new blocks to consumption centres have not been built despite several back-and-forth discussions by the railways and coal officials. As a result, several thousand tons of coal dug out of the ground simply languish at the pits for want of adequate transport," the report said.

“The other problem in developing new blocks was the ‘go/no-go’ controversy. CIL had asked the environment ministry to distinguish between heavily forested areas where coal mining was unlikely to be ever allowed and less forested areas where mining approvals could be accelerated—CIL alleges that the latter approvals never came through," it added.

The report further detailed how there is no clarity on India’s total coal reserves, as “the estimate also includes coal that “has been extracted and burnt during the past 200 years (estimated at about 10 billion tonnes)" “.

Interestingly, on 28 August, Mint had reported on how a national security panel, led by former cabinet secretary Naresh Chandra had recommended that CIL be “split up" to foster competition in the sector.

“Coal India Ltd, being a virtual monopoly under government control, has not allowed open competition to prevail in the coal sector. This has inhibited improvement of efficiencies and modernization in this important sector, so vital to our energy security," the panel’s report said. “Maintaining government monopoly in this area might not be the best model for the long-term development of this sector."

After several other political heavyweights facing a probe in the coal block allotment scam, former Jharkhand chief minister Madhu Koda, too, could come under the scanner. The Economic Times reported Sunday that Koda had recommended 13 coal blocks for allocation to private companies. Citing unnamed sources in the Central Bureau of Investigation, the report said that Koda had recommended “dummy companies" formed just before allocation.

“The agency has already registered five FIRs in the Coalgate scam. Koda and other state representatives who attended the meetings in connection with two private companies—Vini Iron and Steel Udyog Ltd—which got the Rajhara (North) coal block and have been booked by the CBI, are already under the agency’s scanner and will be questioned soon," the report said.

Interestingly, The Indian Express too ran a story on Sunday, that traced Koda’s links to the coal block allocation issue. “Koda, an MP now, is currently in jail in a money laundering case and sometimes attends Parliament while in custody. Just a few days ago, the CBI raided the residence of one Vijay Joshi, owner of Vini Iron and Steel Udyog Ltd, in connection with the coal block allocations. Joshi is widely believed to be a shadow for Koda," the report said.

Meanwhile, The Indian Express newspaper, on Sunday, profiled the Nagpur based Darda brothers—Vijay and Rajendra—and their family, and traced their rise from relative obscurity. Besides interests in the media business—they promote the Lokmat group—the brothers also promote Jas Infrastructure Capital Pvt. Ltd along with Manoj Jayaswal, whom Mint profiled on Saturday.

“In the early 2000s, another controversy hit the Dardas. After the Kargil war, the Lokmat Group launched a fund for Kargil martyrs’ kin, collecting donations that ran into crores. A hostel was built for the wards of the victims, raising questions about how many would actually be able to use it since the martyrs were from all over the country and their children, then very young, were unlikely to come to Nagpur," the report further said. “Vijay Darda, meanwhile, got close to Manoj Jayaswal, who heads the Abhijeet Group that’s also headquartered in Nagpur and who too now stands accused in the coal block case. In fact, when Manoj Jayaswal parted ways with his family a couple of years ago, it was attributed to his friendship with Vijay Darda."

The inter-ministerial group (IMG) looking into coal block allocations has finished quizzing companies that were allotted the blocks and is likely to submit its report to the coal ministry on Monday. The report is likely to be submitted to the Prime Minister’s Office before 15 September.

“All the coal blocks on agenda for three days (September 6-8) have been reviewed," the Press Trust of India (PTI) cited Zohra Chatterji, additional secretary in the coal ministry who headed the panel, as saying on Saturday.

“During the three-day IMG meeting, all the 29 allottees gave progress reports of their blocks and several of them said delays in starting the production resulted due to lack of various clearances from different state governments. Coal block allottees, including Tata Steel Ltd, Reliance Power Ltd, JSW Energy Ltd, Grasim Industries Ltd, Kesoram Industries Ltd, IST Steel and Power, SKS Ispat and Power Ltd, Bihar Sponge Iron Ltd, appeared before the panel during IMG’s three-day review exercise," the PTI report published by The Hindu newspaper said.

8 September, 2012

On Saturday, citing documentary evidence, The Times of India reported that the government-owned Puducherry Industrial Promotion Development Corporation (PIPDIC) signed a pact with J R Power Gen Pvt. Ltd, “owned by Union minister S. Jagathrakshakan’s family, to sell coal at a throwaway price of 25 per tonne even before it was allotted a coal block."

“J R Power (JRP), which did not have any prior experience in the coal sector, approached the government on 14 December 2006, with an offer for joint exploitation of coal blocks," the report said. “JRP promised a royalty of Rs25 per tonne of coal to the Puducherry government besides 10% of the power generated in the proposed power projects. On 17 January 2007, PIPDIC entered into a memorandum of understanding with JRP to sell coal at 25 per tonne for a period of 30 years or until the coal resources in the block exhausted, whichever was earlier. Jagathrakshakan quit as director of the company in 2009 to contest Lok Sabha polls, but his family members continue to be on the board of the company."

“A coal block at Naini in Odisha with about 500 million tones of reserve was allocated to PIPDIC and Gujarat Mineral Development Corporation (GMDC) on 25 July 2007. Months later, JRP sold 51% of its stake to Hyderabad-based KSK Energy Ventures Ltd, an established player with interests in the energy sector," the report further said.

Countering the allegations made by the Bharatiya Janata Party (BJP) on the issue of coal block allocations, and its demand for the Prime Minister’s resignation, Union minister Kapil Sibal demanded on Saturday that the BJP should ask its state chief ministers to resign since mining lease allocations are decided upon by state governments.

“The basic question is that who executes the lease," PTI cited Sibal as saying at a press conference. “BJP men, who are leveling allegations, should be asked to get resignation of their CMs that why they executed the lease," he told a news conference, the news report said. “Because the responsibility was theirs (since) they executed the lease and decided that in whose favour it would be done," he claimed, the PTI report carried on Firstpost.com added.

The CBI is likely to question Congress member of Parliament Vijay Darda, his brother Rajendra and Manoj Jayaswal of the Abhijeet Group, CNN-IBN news channel said Saturday,citing unnamed sources. Jayaswal is likely to be quizzed in Nagpur, the report said. It added that “government officials who connived with the Jayaswal group and overlooked details, were being probed as well".

The DNA newspaper reported on Saturday that farmers in a Chhattisgarh village had resolved to form a coal mining firm of their own and “take on the rapacious companies exploiting their lands".

“The resolution to form their own firm is the fallout of a five-year battle with Congress MP Naveen Jindal’s mining firm, Jindal Steel and Power Ltd (JSPL), that was trying to start operations in the area," the DNA report said. “The matter had reached the Green Tribunal, which cancelled the environmental clearance given to JSPL and pulled up the ministry for environment and forests for not following the ‘proper procedure’," it added.

In an interesting turn of events, senior Delhi government officials may appear on Saturday before the inter-ministerial group looking into the coal block allocations. The Indian Express newspaper reports that the panel headed by additional coal secretary Zohra Chatterji will on Saturday ask the Delhi government why a block allocated to it in Madhya Pradesh remained unexplored for six years.

The Delhi government was allotted the Mahan-II block in 2006, along with the Haryana Power Generation Corp. Ltd, the newpaper said in its report. This is the first time a Congress party-led government is being called to testify on coal blocks, the report added. The panel is likely to take a call on taking back the blocks on 15 September.

Meanwhile, the Business Standard newspaper said the coal ministry is likely to ready its response to the Comptroller and Auditor General’s (CAG) report on coal block allocations by 14 September. The report said the coal ministry is likely to counter the CAG’s arguments on at least five counts—calculating the quantum of extractable reserves in blocks based on averages, cost of coal production and how it varies geographically, geological constraints in mining, taxation offsetting a part of financial gains extended to companies, and valuation of captive coal blocks vis-à-vis the price of coal set by Coal India Ltd.

Meanwhile, Mint on Saturday profiled 57-year-old Manoj Jayaswal, who heads the Abhijeet Group, which has been named by the Central Bureau of Investigation (CBI) this week in its ongoing probe into irregularities in the allotment of coal blocks. The report details how the Abhijeet Group grew in record time.

CNN-IBN news channel ran a story on Hansraj Ahir, a Bharatiya Janata Party member of Parliament from Chandrapur, Maharashtra, who, the channel said, was the first to raise concerns about the coal block allotments in 2005 when he wrote a series of letters to Prime Minister Manmohan Singh and then coal minister Shibu Soren between 2005 and 2007, but got no response. The Congress, however, refutes Ahir’s role, the channel said. “We can’t say he exposed it," it cited Congress leader Harish Rawat as saying.

7 September, 2012

The political battle over the coal allocation issue continued Friday with Prime Minister Manmohan Singh blaming the Bharatiya Janata Party led opposition for a “wasted session of Parliament."

“I feel very strongly that this is making a mockery of parliamentary democracy," the Prime Minister said in a message released after the last day of the current session of Parliament was also stalled. “We do incalculable damage to the reputation of India’s Parliament if we resort to disruption of Parliament to make a political point."

“Those who prevent Parliament from functioning, disable the voice of the people. They take away their right to hear their representatives debate issues in a reasoned manner when the case for and against a point of view can be heard. They force them to listen instead only to voices in the street, which is not the place for reasoned discourse. This is the road to a dysfunctional politics which will only produce agitational politics and a deeply divided and disenchanted country," he said.

Bharatiya Janata Party leaders Sushma Swaraj and Arun Jaitley reiterated that the party will take the fight on the coal allocation issue to the streets. This came after the monsoon session of Parliament was washed because of the opposition’s protests.

“The UPA (United Progressive Alliance) is a regime which is committed to kleptocracy," Jaitley said at a press conference in New Delhi. “Let the Centre have a commission of inquiry where the Prime Minister has to come and depose how he conducted the affairs of the coal ministry," Jaitley added, demanding an independent probe into the allocations.

Swaraj termed the inter-ministerial group looking into the allocations, an “eyewash."

The month-long monsoon session of Parliament was washed out due to the protests over the coal block allocation issue. The session ended today.

Earlier in the day, the BJP-led National Democratic Alliance had protested inside the Parliament complex.

“The PM is the head of this corrupt coalition government. And if the PM is let off then no one else would fear the law. BJP won’t let the PM go scot free," CNN-IBN cited BJP leader Mukhtar Abbas Naqvi as saying.

At least two more political heavyweights—former corporate affairs minister Prem Chand Gupta of the Rashtriya Janata Dal, and junior minister for information and broadcasting S. Jagathrakshakan of the Dravida Munnetra Kazhagam (DMK)—could come under the scanner after media reports said that they or their kin benefited from the coal block allocations.

In a front page story on Friday, The Economic Times newspaper said that IST Steel and Power, a part of the IST Group promoted by Gupta’s sons Mayur and Gaurav, was allotted a coal block in Maharashtra. Gupta, however, denied having benefited from the allocations, the report said.

In another report, Hindustan Times newspaper said that Jagathrakshakan may come under scrutiny as his company JR Power Gen Ltd had formed a joint venture with the Puducherry Industrial Promotion Development and Investment Corporation, which had been allocated a coal block in Talcher in Orissa, in 2007.

“As of February 6, 2008, Jagathrakshakan, wife J. Anusuya, son J. Sundeep Anand and daughter J. Srinisha are shareholders of JR Power Gen, holding a total of 10,000 shares and 49%. KSK Energy Ventures Ltd holds 10,410 shares (51%). JR Power Gen is an unlisted company and has not completed any public or rights issue since the date of its incorporation. These details did not find mention in Jagathrakshakan’s details in the list of assets and liabilities by Lok Sabha members as of August 31, 2012," the report said.

These revelations come, after the names of three leaders belonging to the Congress party--Subodh Kant Sahay, Vijay Darda and his brother Rajendra Darda--and one to the principal opposition Bharatiya Janata Party, Ajay Sancheti, have already surfaced.

Interestingly, another report in The Economic Times on Friday said that the Central Bureau of investigation, the Comptroller and Auditor General and the Central Vigilance Commission could co-ordinate their actions over the investigations into the allocations of coal blocks. This, even as several companies have already been deposing before the inter-ministerial group, which is looking into cancelling the allotments and likely to submit its report by 15 September.

Meanwhile, in a near total washout of the month-long monsoon session of the Lok Sabha, the house was adjourned sine die, after the opposition, led by the BJP, continued to demand the resignation of the Prime Minister over the coal block allocation issue.

Earlier in the morning, the BJP-led National Democratic Alliance began protesting inside the Parliament premises.

“The PM is the head of this corrupt coalition government. And if the PM is let off, then no one else would fear the law. The BJP won’t let the PM go scot-free," CNN-IBN quoted BJP leader Mukhtar Abbas Naqvi as saying.

6 September, 2012

For the 12th straight day, Parliament on Thursday was disrupted over the issue of coal block allocations.

Although the current Parliament session ends Friday, the political maelstrom created by the alleged scam in the allotment of coal blocks is unlikely to abate, with the principal opposition Bharatiya Janata Party (BJP) threatening to take the issue to the streets. The BJP is demanding that the government cancel all allocations and subject the entire process to a judicial review.

On Thursday, in a counter-offensive, a large number Congress workers in Orissa clashed with the state police demanding the resignation of state chief minister Naveen Patnaik, alleging that his government made recommendations regarding the allocation of coal blocks.

On Tuesday, the Central Bureau of Investigation (CBI) began raids on at least five companies—Vani Iron and Steel Udyog Ltd, Jas Infrastructure Capital Pvt. Ltd, AMR Iron and Steels Pvt. Ltd, JLD Yavatmal Energy Ltd and Navabharat Power Pvt. Ltd—that were allocated coal blocks. The CBI also filed a first information report (FIR) against a Congress member of Parliament Vijay Darda and his brother Rajendra Darda, a Congress minister in the Maharashtra government. They, along with Manoj Jayaswal, are the promoters of Jas Infrastructure.

On Thursday, citing documents, New Delhi Television (NDTV) said that the Darda brothers and Jayaswal “appear to have made windfall gains" from coal blocks allocated in Chhattisgarh, Jharkhand and Bihar.

At least 152 coal blocks had been allocated between 2004 and 2009, as per a response given by the coal ministry to a Parliament question. Between 1993 and 2011, a total of 195 blocks were allocated to private and government companies.

Prime Minister Manmohan Singh was in charge of the coal ministry for a part of this period, from November 2006 to March 2009.

In fact, as early as 18 March 2008, Mint had first reported about significant irregularities in the award of coal blocks to some 31 companies, nine of which had been rejected in earlier stages of the bidding process for not meeting rules prescribed by the government.

On 27 August, Prime Minister Manmohan Singh said that while he took “full responsibility" for the decisions of the coal ministry, the observations made by the Comptroller and Auditor General (CAG) regarding the coal block allocations were “clearly disputable."

“The policy of allocation of coal blocks to private parties, which the CAG has criticized, was not a new policy introduced by the UPA (United Progressive Alliance). The policy has existed since 1993 and previous governments also allocated coal blocks in precisely the manner that the CAG has now criticised," the Prime Minister said in his government’s defence.

“The UPA made improvements in the procedure in 2005 by inviting applications through open advertisements after providing details of the coal blocks on offer along with the guidelines and the conditions of allotment," he added.

On 2 September, in a blog post, former deputy Prime Minister and BJP Lok Sabha member, L.K. Advani rejected the Prime Minister’s “poor defence of ‘Coalgate.’ "

“It is now universally acknowledged that allowing discretionary allocation of precious resources like spectrum, oil, gas and minerals gives ample scope to people harbouring corrupt and collateral intentions," Advani wrote in his blog.

The CAG report on coal block allocations that was tabled in the Parliament on 17 August, said at least 57 private companies made a gain of Rs1.86 trillion.

The auditor has been critical of the allocations, primarily on three counts.

First, it had observed that the screening committee that was set up to oversee the allocations did not follow a transparent and objective process.

It further stated that competitive bidding could have been introduced in 2006 itself. It said that administrative procedures could have been quickly amended by the government, rather than going in for a lengthy legal process.

Third, CAG said the delay in the introduction of competitive bidding meant that the bidding process was beneficial to private companies.

Interestingly, CAG had, in its draft report first reported by The Times of India on 22 March, said that the undue benefits due to “windfall gains" amounted to as much as Rs10.7 trillion, nearly six times the Rs1.76 trillion figure it had estimated as the presumptive loss in the allocation of 2G spectrum. The draft report had listed 76 private companies as beneficiaries.

On 5 September, Mint reported that it tried to track down 93 small, mid-sized and obscure companies that have been allocated coal blocks by the government.

There, however, appear to be differences within the government on the question of scrapping the allocation of coal blocks.

Although an inter-ministerial group looking into this is likely to give its recommendation by 15 September, The Indian Express reported on 3 September that coal secretary S.K. Shrivastava had objected to the panel’s view recommending that blocks allocated to the Naveen Jindal-owned Jindal Steel and Power Ltd, on which no mining had occurred, should be taken back. The panel is headed by additional coal secretary Zohra Chatterji, who, as per the report, disagreed with Srivastava on the issue.

An NDTV report said the BJP’s stand on the issue could be diluted because the Chhattisgarh CAG had indicted SMS Infrastructure, a company promoted by BJP Rajya Sabha MP Ajay Sancheti, who, the news channel said, was “known for his proximity" to BJP president Nitin Gadkari. The Chhattisgarh CAG had said in April that the allocation of coal blocks to SMS Infrastructure had cost the exchequer Rs1,000 crore, NDTV said.

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