Coal Allocation Scam / Coalgate

Discussion in 'Politics & Society' started by Daredevil, Aug 15, 2012.

  1. Daredevil

    Daredevil On Vacation! Administrator

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    Coal mines allocation to private companies caused a loss of Rs 1.86 lakh crore: CAG


    The Comptroller and Auditor General (CAG) report on coal blocks allocation suggests that it could be an even bigger embarrassment than the 2G spectrum allocation scam with top private companies making a windfall of Rs 1.86 lakh crore due to lack of bidding.

    The final draft of the CAG report on the coal blocks allocation, accessed by CNN-IBN, says that the allocation of captive coal mines from 2004 to 2006 was not transparent. Notably, Prime Minister Manmohan Singh held the Coal Ministry portfolio from 2006 to 2009.

    It further said that a six-year delay in moving to competitive bidding led to huge losses to the state.

    The CAG report lists Tata group, Naveen Jindal group, Essar group, Abhijeet group, Laxmi Mittal's Arcelor and Vedanta among the beneficiaries.

    However, CAG does not mention the role of the PMO and state governments in the coal blocks allocation.

    The auditing watchdog has blamed the steering committee recommendations that gave away captive coal mines without bidding.

    The CAG report has said that the delay in introducing competitive bidding, first suggested in 2004, led to major benefits to the private sector, but the rules for auction only got finalised six years later in 2012 after a series of controversies.

    Till 2004 June, only 39 blocks were allotted, but in order to improve the production, 142 allotments were made between July 2004 and 2006 to private and government companies.

    The CAG says the allocation made by the steering committee was not transparent and helped many private players. As many as 15 blocks given to private players did not even start production till March 2011.

    The Central Bureau of Investigation (CBI) is also investigating the coal scam. Initial reports of the investigating agency suggest they are looking at the role of state governments in allocating without bidding.
     
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  3. Daredevil

    Daredevil On Vacation! Administrator

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    Another feather in the cap of this corrupt government.

    Again I ask the losers who are against Lokpal, how were one to prosecute this government and the ministers involved in this corruption?. Using Congress Bureau of Investigation?. Or we should have to go to court every time to prosecute the ministers, oops..., in this case the prime minister?.
     
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  4. Daredevil

    Daredevil On Vacation! Administrator

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    CAG may let PM off the hook on coal blocks, but not ministry

    The Comptroller and Auditor General of India’s report on the allocation of coal blocks, which is likely to be tabled in Parliament on Thursday, has reportedly pegged the loss from non-transparent allocation of coal blocks at Rs 1.86 lakh crore and may recommend penalties and disincentives for non-performers and reward performers with coal blocks.

    The report, however, exonerates the Prime Minister’s Office from any wrong-doing and holds the steering committee dealing with the subject responsible for the lapse.

    Prime Minister Manmohan Singh held the coal portfolio between 2006 and 2009. However, a report in the Economic Times said CAG may pull up the coal ministry for not monitoring the progress of mines periodically and its Kolkata-based department, the office of the Coal Controller, for not conducting any field inspections.

    149 blocks were allotted to several private companies during 2004-2006, out of which 15 blocks that were given to private players did not start production till 2011. Reuters

    As many as 149 blocks were allotted to several private companies during 2004-2006, out of which 15 blocks that were given to private players did not start production till 2011. Some of them sold off the blocks at astronomical prices.

    The coal ministry had last year cancelled 24 allocations for delays in development and is currently issuing show-cause notices to 58 companies, threatening cancellation of allotments.

    CNN-IBN, which has accessed the CAG report, named Tata, Naveen Jindal, Essar, Abhijeet, Arcelor and Vedanta groups as the beneficiaries of this flawed allocation. The Tatas and Jindals are alleged to be the biggest beneficiaries.

    A report in Business Standard has also alleged undue benefits of Rs 15,849 crore extended by the government to Reliance Power by way of surplus allocation for two of its UMPPs.

    The CAG report has also asserted that not spelling out the terms of the usage of surplus coal upfront has contributed to handing over undue benefits to the allottees “to the detriment of the ultimate power consumers.” And it is this ambiguity which allowed bidders like Reliance Power to interpret the clauses for usage of the surplus coal and vitiated the process of allocation.

    Another CAG report that is set to rock Parliament this week pertains to the implementation of public private partnership projects at Delhi International Airport Ltd (DIAL). The draft report says DIAL was given land at a highly concessional lease rent. DIAL is a joint venture consortium in which the GMR group holds 54 percent, Airports Authority of India (AAI) 26 per cent, and the Frankfurt and Malaysian airports 10 percent each.

    Going by the three reports, the UPA government surely has a lot to worry about and the coal, power and aviation ministries are ready with a strong defence. Another report in the Economic Times today said government would label CAG’s calculation of financial gains to private companies as misleading since there are wide variations in the extractability even in mines located in the same coal fields.

    Secondly, on the issue of diversion of coal from mines allocated to Reliance Power for the Sasan ultra mega power plant, the power ministry is going to use a high court ruling validating the biffing procedure to its advantage.”The attorney general’s opinion, who said the decision to allow surplus coal to be used for a power plant being set up by RPL at Chitrangi, was well-considered and need not be reviewed,” the report said.

    And last, the government is likely to challenge CAG on “factual inaccuracies” in its report on privatisation of the Delhi airport.”The so-called post-contractual benefit given to GMR, which is said to be a part of the CAG report, is “grossly misleading” and hypothetical. The government is likely to argue that by the same calculation, the Airports Authority of India is likely to gain Rs 3 lakh crore over the same period of 54 years on account of the gross revenue share of 45.99 percent,” the report said.
     
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  5. sob

    sob Moderator Moderator

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    NDTV had a very good investigative programme by Srinivasan Jain , titled Truth or Hype.

    Basically they took off on the comments by the former Secretary in the coal ministry and documents accessed by RTI. Some interesting conclusions

    1. There was a big scope for manipulation due to the ground rules.

    2. Like the 2 G scam a few unknown companies got the captive mines for free and then sold off their equity for a large sum to another company.

    3. Some companies like Jindals got the captive coal block for free but they were selling the Power not to the SEBs at predetermined prices but were selling Power at rates as high as Rs. 7 per unit.

    4. Both the Coal Ministry under Mr.Jaiswal and the Power Ministry under Mr.Shinde were content to shift the blame on one another.

    Link to the video Truth vs Hype of Coal-gate: Part I Video: NDTV.com
     
  6. sob

    sob Moderator Moderator

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  7. amitkriit

    amitkriit Senior Member Senior Member

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    I believe some political parties in opposition are involved as well, and hence we do not see them crying like they did during Spectrum Scam.
     
    Last edited: Aug 16, 2012
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  8. Daredevil

    Daredevil On Vacation! Administrator

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    India Lost $33 Billion Giving Away Coal Mines, Auditor Says

    India’s policy of allocating coal mines without auction may have cost the government 1.86 trillion rupees ($33 billion), the state auditor said in its final report of mining losses to the exchequer.

    The Comptroller & Auditor General of India’s assessment, presented in the parliament today, said the mines gave undue benefit to companies including Jindal Steel & Power Ltd. (JSP) and Tata Steel Ltd. A Feb. 28 draft, which included state-owned companies, estimated the loss at 10.7 trillion rupees and triggered a probe by the Central Bureau of Investigation.

    The report comes at a time when the government is battling a series of graft charges that have slowed down decision making and impeded reforms. Prime Minister Manmohan Singh, who was in charge of the coal ministry for part of the period under review, has been personally blamed by opposition parties for the loss.

    “It’s over-simplification of mining valuations,” said Debasish Mishra, a senior director at Deloitte Touche Tohmatsu India Pvt. “One can’t compare the valuation of an operational mine with an unexplored mine as the risks are exponentially high at the beginning. Whichever mines were allocated for captive use to companies had no reliable data on reserves.”

    The state auditor’s report on issuance of phone permits sold in 2008 had led to India’s biggest corruption probe and the arrests of government and company officials, and a cabinet minister.

    Transparent Method

    India began allocating coal mines to companies for their own use in 1993 and gave away 194 blocks with reserves of 44.4 billion tons. Almost half these reserves, spread across 142 blocks, were explored, the auditor said in the report.

    “There couldn’t have been a more transparent method of allocating coal blocks at that time,” Coal Minister Sriprakash Jaiswal told reporters today in New Delhi. “It was the need of the hour to involve the private sector to boost coal production, as Coal India alone was unable to meet the rising needs.”

    State-run Coal India Ltd. (COAL) is the world’s biggest producer of the fuel.

    Of all the coal blocks allocated for captive use, only 30 have started production. Only one among the 57 blocks the state auditor took up for audit began production, Jaisal said.

    The auditor estimated a gain of 295.40 rupees a metric ton and multiplied the number with the reserves at the captive mines. The estimate of gain was reached by taking the difference between the average price of coal and the average of cost of production at Coal India’s mines in the year ended March 31, 2011.

    The estimate considered only open-cast mines. It counted 73 percent of the reserves at open-cast mines and 37 percent of reserves at mixed mines, according to the report.

    India implemented an auction policy for the allocation of coal mines in 2010. The coal ministry subsequently prepared a list of 54 coal blocks with reserves of 19 billion tons for captive allocation. Some of these blocks will be auctioned and other given away to state-run miners, according to the coal ministry’s web site.
     
  9. ani82v

    ani82v Senior Member Senior Member

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    For 2G, even now its only Swami v/s Govt. Opposition is only at the sidelines.

     
  10. Daredevil

    Daredevil On Vacation! Administrator

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    NDTV program uncovering the Scam in Truth Vs Hype programme

     
    Last edited: May 10, 2015
  11. Ray

    Ray The Chairman Defence Professionals Moderator

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    What a shame.

    One thieving following another.

    Failing economy.

    Failing communal harmony.

    High on populism and lining of pockets!

    And the singing of paeans by the committed media!
     
    Last edited: Aug 17, 2012
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  12. agentperry

    agentperry Senior Member Senior Member

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    CAG just brag and have no reality awareness. though tendering should have been done but the way CAG wants things to be priced will make anything unaffordable for people company and others. then CAG will be happy. just see the price difference we are seeing because of CAG aligned 3g auction
     
  13. Raj30

    Raj30 Senior Member Senior Member

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    Subodh Sahai urged PM to allot coal blocks to ‘brother’s firm’
     
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  14. sob

    sob Moderator Moderator

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    In the NDTV show the minister is asked how the Jindals who got captive coal mines are charging Rs. 7 per unit I.e they were charging merchant rates which are basically spot rates and are sold at very high prices. SEBs buy at this rate to tide over the shortfall they are facing. There is no reply from the minister as was expected.
     
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  15. The Messiah

    The Messiah Bow Before Me! Elite Member

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    And someone on sb was arguing with me the other day that private companies dont indulge in corruption

    :yey:
     
  16. Apollyon

    Apollyon Führer Senior Member

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  17. sob

    sob Moderator Moderator

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    Then who bribes the politicians, who funds their elections.
     
  18. Raj30

    Raj30 Senior Member Senior Member

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    PMO paved way for opaque allotments of coal blocks - TOI Mobile | The Times of India Mobile Site
     
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  19. Daredevil

    Daredevil On Vacation! Administrator

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    Does CAG report provide ‘an iota of truth’ for PM to quit?

    By Sanjay Singh

    New Delhi: In May this year, the Prime Minister made an emotional defence of his integrity in the coal blocks scam that may yet come to haunt him.

    Returning to India after a trip to Myanmar, the PM said: “It is unfortunate that irresponsible allegations relating to irregularities in the allocation of coal blocks are being made without confirming facts. If there is any iota of truth, I will give up my public life. My long public career as finance minister, as Leader of Opposition in the Rajya Sabha and now as Prime Minister has been an open book,” he had said.

    Now that the final report of the Comptroller and Auditor General (CAG) on the allocation of coal blocks has indicated a benefit of Rs 1.86 lakh crore to private players, Manmohan Singh is expected to make a statement in Parliament on this. The report blames the coal ministry, which was headed by the PM from 2006 to 2009, for allocating blocks non-transparently, and politically it is difficult for the Congress party to distance the PM from the CAG’s observations.

    Though it is not unusual for both houses of Parliament to be adjourned within minutes, Tuesday’s disruption is painful for Manmohan Singh and his party since this is the first time Mr Clean is himself the direct focus of attack on an issue relating to alleged corruption and crony capitalism. “In 2G, the Prime Minister was vicariously and morally responsible, here in the coal ghotala, which is even bigger than 2G, he is directly responsible,” is the refrain of BJP leaders.


    The CAG report has provided fresh ammunition to the opposition to corner the government on corruption, after the failure of the Anna Hazare and Baba Ramdev fasts to shake the UPA. AFP

    UPA strategists have worked hard over the extended weekend to focus their counter-strategy on two points – that the practice of giving coal mines to private players had been a legacy of the NDA, and that the members in the screening committee that allotted the blocks included representatives from the states concerned. Most mineral-rich states are ruled by the BJP and other non-Congress governments.

    But whether this counter-attack is enough to protect the PM from criticism is another matter. While the previous policy enabled allocation of captive mines for power generation, the scope of coal usage has kept expanding, and the Prime Minister has this time been seen as delaying the process of transparent allocations through competitive bidding.

    The Opposition is in no mood to let the issue go easily. While the Assam issue has become a huge humanitarian and governance issue, the BJP has decided to keep the focus on Coalgate. While technically the CAG report is not discussed in Parliament on presentation (it comes to the house only after the Public Accounts Committee examines it, the BJP is citing the example of the coffin scandal during NDA rule when the Congress had stalled parliament accusing then Defence Minister George Fernandes of wrongdoing over a CAG report.

    The CAG report has provided fresh ammunition to the opposition to corner the government on corruption, after the failure of the Anna Hazare and Baba Ramdev fasts to shake the UPA.

    A lot depends on how the PM defends himself.
     
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  20. Daredevil

    Daredevil On Vacation! Administrator

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    CAG report: CBI may register multiple FIRs in coal 'scam'

    The CBI is likely to register more than one FIRs in the alleged irregularities in allocation of coal blocks after it came across several cases of violation of norms by state government officials and allottees.

    The agency has already questioned senior bureaucrats who were overseeing allocation of coal blocks during 2006-09, CBI sources said.

    Meanwhile, the agency is also taking into cognisance the Comptroller and Auditor General report on alleged coal block scam which was tabled in Parliament on Friday.

    The sources, however, made it clear that CBI would not be going into policy issues but will limit its role to aspects where criminality could be established.

    The agency has also questioned members of screening committee including Secretaries and Joint Secretary in the Ministry, CBI sources said.

    They said the questioning of the Coal Secretaries, who also chair the screening committee, was done to understand the issues involved in the allocation of coal blocks during the period and so far agency has not found any irregularity on their part.

    The agency has shortlisted nearly 15 companies which allegedly violated norms of allotment of coal blocks and questioning of their officials is going on, they said.

    The agency has registered the Preliminary Enquiry (PE) , which is the first step of initiating the CBI probe, against unknown persons in connection with a complaint referred to it by the Central Vigilance Commission.

    Allocation of coal blocks is done through an inter-ministerial inter-governmental body called the Screening Committee chaired by coal secretary.
     
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  21. Iamanidiot

    Iamanidiot Elite Member Elite Member

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    The congress looks wants PM to resign
     

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