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Admin · Guru

RE: Coal, Oil Scam- Loss 10.9 Lakh Crore

Admin · Guru

1st-come 1st-served preferred for mining leases: Centre to SC

Dhananjay Mahapatra TNN

New Delhi: World over,the first-come first-served mode is preferred over auction route to allot mining leases,the Union government told the Supreme Court ahead of the July 10 hearing on the Presidential reference questioning the apex court ruling which said distribution of natural resources should be through auction only.
The apex court had on February 2 cancelled 122 telecom licences faulting allotment of spectrum or mobile services bandwidth through first-come first-served mechanism and said natural resources should be distributed only through auction and not as largesse of the government.
The mandate to auction all natural resources piqued the government and it took the constitutional route to question the efficacy of applying this ruling to other natural resources like mining,which has traditionally been done through FCFS mechanism for the last four decades.
Filing statement of facts on questions raised by the President and indicating the broad contours of its line of argument before the Supreme Court,the Union government said through counsel Devadatt Kamat,The touchstone for testing any policy of distribution of natural resources is whether it sub-serves the common good in accordance with the mandate of article 39(b) of the Constitution.
Financial gain to the state,which was highest through auction,was relevant but not the sole guiding factor in formulating policy for distribution of natural resources,it said.Gain cannot be measured only in terms of revenue.Revenue considerations may assume secondary consideration to developmental considerations, the Centre said.
It said a government keeps in mind several considerations while formulating an allocation policy for a natural resource to achieve the goal of common good or serve public interest.The considerations may be strategic,economic,security,growth of natural resource,social welfare through such allocations and also financial value of such allocations, it said.
Concept of auction could not be applied to natural resources such as distributing fishing rights,which was a localized activity.Any policy with regard to fisheries has to take into account the traditional occupation of local fishermen.The application of auction principle would mean destruction of the livelihood of the traditional fishermen,who would be unable to compete with wellorganized and huge fishing companies, the Centre said.
It quoted a three-year-old World Bank report to tell the court that world over,petroleum licences were allocated using auctioning or competitive methodology,while mining licences were generally allotted on a first-come first-served basis.
A follow-up study of the World Bank report by South Africas University of Wi****ersrand,which examined the process in eight countries,found that Ghana and Madagascar adopted FCFS policy while Algeria,Mongolia,Tanzania,Congo,Zambia and Chile preferred a combination of FCFS and auction.

Admin · Guru

coal scam 29_07_2012_007_006

Admin · Guru

Coalgate shatters Congs PM-is-clean defence

TIMESNEWSNETWORK

New Delhi: Coalgate may test Congresss long-held PM-isabove-board shield against corruption,with allegations of irregularities during Manmohan Singhs charge of coal ministry set to expose the party flanks in the upcoming political season.
CAGs view that coal block allocations caused windfall profits to private parties is expected to put corruption back on the political agenda.The opposition is smacking its lips at the prospect of stalling Parliament when it resumes on Tuesday because it senses an opportunity to target the PM,which they were deprived of despite the strong graft campaign over the last year.
The scams that fuelled the Anna Hazare campaign like CWG and 2G were confined to individual ministries of UPA,with Singh being questioned as a weak leader.But Coalgate is seen as a progression since the PM was in charge of the ministry at the time of the said irregularities.AICC spokesman Manish Tewari rejected allegations that the PM had presided over Coalgate,saying,We reject the insinuation with the contempt it deserves.
However,there is concern in Congress in the run-up to elections in Himachal Pradesh and Gujarat.The return of graft in political discourse will gift the opposition the ammunition that,in April,decimated Congress in Punjab and Goa and nearly tripped it in Uttarakhand.While Congress has readied its defence,pointing to alleged flaws in CAGs conclusions and BJP swearing by the same policy on coal blocks,the ruling party is seen as more vulnerable on graft front.
Technical arguments on audit reports are unlikely to trump the rhetoric that Narendra Modi may launch,eager to cross swords with the PM directly.Gujarat leaders said aggressive Muslim protests over Assam riots and corruption are two issues that can weaken Congresss prospects.
December polls are viewed as Congresss last chance to retrieve the situation from a downward spiral following the Hazare agitation.Congress hopes it can tide over the fresh CAG-authored crisis,but an opposition success in yoking corruption to Congress may have lasting impact on the 2014 political scenario.
Congress ranks are concerned that the partys defence on Coalgate that policy is a government prerogative does not influence public perception since it is a technical argument which seems to be soft on irregularities.This was our stand even in 2G, lamented a leader,referring to how opposition turned it into a major plank in state polls.

Admin · Guru

Coal ministry ignored law ministrys advice favouring auction: CAG

Sanjay Dutta & Pradeep Thakur TNN

New Delhi: Pointing out that the government extended windfall gains of Rs 1.86 lakh crore to private players by distributing coal blocks without bidding over years,the CAG has said,In a report,which was tabled in Parliament on Friday,the auditor noted that the government had set a cut-off date of June 28,2004,for distributing blocks through nomination but kept on awarding coal blocks through the screening committee route till 2009.The government could have introduced competitive bidding in 2006 through administrative directive as advised by the law ministry,the report said.In fact,while the CAG stopped short of asking for cancellation of allocations,it did ask for a review of the decisions.
Politically,the latest volley of censures from the auditor will ensure that the focus on corruption in the allocation of natural resources during the two UPA regimes does not fade away.Buoyed by the three reports,the opposition demanded the PMs resignation saying that the auditor has validated its charge of crony capitalism with free rein to carpet baggers.
The government,which had anticipated the onslaught,reacted by rejecting the charge and criticizing the auditor who has been a source of intense political headache since it came out with its scathing indictment of the 2G spectrum allocation.
Official sources said bidding could not be invited for blocks since doing so would have required amending the mining law,a lengthy process which could have proven counter-productive in view of the rising demand for coal for power generation and other industries.Further,they argued that the allocations were done based on recommendations of a screening committee that included representatives of states,including those ruled by the opposition.
But the final CAG report has addressed the coal ministrys argument why the ministry could not switch to auction despite strong opinions from within as well as the law ministry since 2004: it would have held up release of coal for crucial consumers.The auditor pointed out that the law ministry had said government could introduce auctions by merely amending the existing administrative procedure and without having to legislate afresh.
This opinion is significant as it addresses the concern that enacting a law would hold up distribution of coal.Obviously,CAG stressed,Thus,competitive bidding could have been introduced in 2006 as per the advice of the law ministry. It also emphasized that the law ministry had left it for the coal ministry to decide which route to take administrative or legislative for holding auctions.
The report also noted that the coal ministry did not stir even when the law secretary repeated the same advice in August 2006.
Going into the sequence of how the ministry went on handing out blocks in spite of strong advice to the contrary,the auditor said the then coal secretary had noted in 2004,Since there is substantial difference between the price of coal supplied by Coal India and coal produced by captive mining,there is windfall gain for the person who is allotted a captive block. The seniormost official of the ministry had argued for a more transparent and objective process like competitive bidding,but failed to goad the ministry into a rethink.Despite such clear advice,coal ministry went ahead for allocation of coal blocks through screening committee for allocation of 38 coal blocks and continued with the process till 2009,the CAG said.
Altogether,75 mines with 15.35 billion tonnes of geological reserves of coal were given out to private companies,including 57 open cast mines.The report estimates 6.3 billion of the reserves in open cast mines as recoverable,assuming an extraction rate of 73% for open cast mines and 37% for mixed mines.This is good enough for generating over 50,000 mw for 25 years.
CAG has taken the open cast mines alone for calculating the gains.It has first taken the difference between the average sale price of Rs 1,028.42 per tonne for all grades of coal mined from open cast mines by state-run Coal India Ltd and the average production cost of Rs 583 per tonne.Then it has made an allowance of Rs 150 per tonne towards financing cost in line with the coal ministrys suggestion.After adjustment of this allowance,the final benefit has been taken at Rs 295.41 per tonne for the extractable reserve.
The final report,however,is silent on two counts.Unlike the 110-page draft report,the final report does not argue against giving coal blocks to private cement,steel and power plants existing or proposed.The draft report had said that since steel,cement and merchant power prices are market-determined,consumers dont get benefit of industries getting coal mines for free.

Admin · Guru

Cong questions estimate of loss

TIMES NEWS NETWORK

New Delhi: Congresson Friday slammed the Comptroller and Auditor General (CAG) for not understanding the basics of development economics,arguing that auctioning of coal blocks would have hiked the input cost for power plants and made electricity costly.
Congress spokesman Manish Tewari,reacting to CAGs finding that allocation of coal blocks had caused massive loss to the state exchequer,said coal blocks were for captive purposes of steel,power and cement industry and the coal extracted could not be sold in the open market.
Power tariffs are decided by regulatory authorities in states based on input cost which are provided by the respective players, he said,hinting that auction would make electricity costly.
Tewari questioned the CAGs decision to estimate a notional loss,saying even the Supreme Court order cancelling the 2G licences was silent on presumptive loss and had left the issue to the parliamentary committees.
The Congress spokesman accused BJP of double standards,saying it had ducked CAG reports on malfeasance in Gujarat and Chhattisgarh on the grounds that the PAC would look into them,but chose to go ballistic when the report concerned a Union ministry.
The Congress also questioned the CAG methodology,asking how the auditor could calculate notional loss when only one of the 57 coal blocks it had scrutinized had become operational.
Tewari said BJP had followed the same procedure of coal allocation from 1998 to 2004 when it was in power and its governments in Rajasthan and Chhattisgarh had opposed the suggestion that the policy be changed to a process of open auction.Why have those objections not been withdrawn till today he asked.

CAG has crossed the line: Govt

Coal Allotment Couldnt Be More Transparent

TIMES NEWS NETWORK

New Delhi: The government has pitched its defence against Coalgate on the purported reluctance of states,including those ruled by BJP,to assign coal blocks through auctions and their presence in the screening committee that made the allocations.
The Centre argued that the decision to keep the auction route on hold was driven by delays caused by a lengthy consultative process and mineral-rich states raising federal issues at a time when demand for coal was soaring.Also,earlier governments had acted no differently.
Leading the governments combative response,minister of state in PMO,V Narayanasamy,said the CAG had exceeded its mandate.The report has not been tested by Parliament.The PAC will examine it,then we will see what view emerges, he said.
Coal minister Sriprakash Jaiswal said,The policy adopted to allocate coal blocks was not faulty.There could not be a more transparent policy for allocation.
An official note said a wide consultative process and efforts to ensure transparency saw the screening committee on coal blocks involve state government officials while applicants were also invited to present their case.The government feels comparison with Coal India price is only notional.There can be no loss or gain on account of allocation of coal blocks to government companies.Allocation to government companies without bidding is permissible even today.
The alleged gains have been calculated at 90%-100 % of geological reserves but this is not correct because geological constraints reduce minable reserves.Out of the total coal blocks allocated,57 are open cast mines,38 underground and 31 mixed mines and the rest regionally explored blocks.
Minable reserves of these calculated on the basis of peak rated capacity of the mines with 25 years full extractability works out to 14 BT (billion tonnes) as against the calculations maid taking extractability at 33.16 BT to 36.85 BT.Therefore assessment on windfall gain cannot be made, the note said.
Then principal secretary to PM T K A Nair called a meeting on July 25,2005,attended by secretaries of Bengal,Chhattisgarh,Rajasthan,Odisha and Jharkhand.Representatives of state governments felt that there might not be any need for a change if screening committee procedure was made more transparent,they also strongly felt the proposed changes would amount to withdrawal of powers from states, the note said.
With the PMs office in the line of fire,the government has said the law ministry gave conflicting views on whether auctions needed a change in law or could be initiated by an administrative order.It has also pointed to objections raised by the states to say that CAG has taken a simplistic view.

MEN IN CHARGE OF COAL MINISTRY

May 2004 |

Shibu Soren sworn in as coal minister in UPA I

July 2004 |

Soren resigns after a non-bailable arrest warrant is issued against him.Portfolio goes to the Prime Minister

Nov 2004 |

Soren re-inducted into the cabinet and given back coal ministry

Nov 2006 |

Prime Minister Manmohan Singh takes over coal ministry after Soren resigns as he is convicted in the murder case

May 2009 |

Sriprakash Jaiswal given coal ministry with independent charge,after UPA II comes to power

Admin · Guru

PMO hand in nixing coal block auction

Preferred Amendment Of Mines And Minerals Act,CAG Report Notes

TIMES NEWS NETWORK

New Delhi: Despite prodding a recalcitrant coal ministry to introduce auctions of coal blocks,the Prime Ministers Office might have itself set the clock back and paved the way for opaque allotments by favouring an amendment of the Mines and Minerals Act.
In a meeting held in the PMO on April 4,2006,it was decided that changes in the Mines and Minerals (Development and Regulation) Act might be the preferred path to introduce auctions as this will be applicable to all minerals,not just coal.
The Comptroller and Auditor General (CAG) report on coal allocations notes that it was decided the proposal to amend the MMDR Act should be vetted by the law ministry,setting in motion an elaborate process.Later,in July,2006,the law ministrys opinion that coal auctions could be initiated through administrative action was overlooked.
It was in the context of PMOs view that wider changes covering all minerals should be effected that PM Manmohan Singh approved the decision to continue coal allocations through a screening committee on August 6,2006.MMDR amendments could be brought into force only after Parliament passed them in August,2010,almost two years after the Bill was introduced in Parliament in 2008,and referred to a standing committee that submitted its report in February,2009.This accounted in good measure for the delay since competitive bidding was mooted in June,2006.
PMO had earlier taken a relaxed attitude towards competitive bidding based on the coal ministrys view that auctions will be enforced prospectively.But when warned that pressures will mount for continuation of the present procedure if a quick decision on auctions is not taken,PMO sought an urgent update of the Cabinet note.
The coal ministry kept on raising hurdles,sometimes referring to reported objections by states that auctions will raise input costs and possible implications for federal polity.In the meanwhile the screening committee made allocations that have been slammed by the CAG for lacking transparency.In the 2G case,there was a first-come-first-serve policy although allegedly manipulated but in coal allocations the auditor has said he could not discover any process by which bids that made the cut were evaluated against the rejected ones.

Opposition to raise Coalgate issue in Parliament

The opposition is gearing to take on the government over adverse CAG reports focusing on allocations of coal blocks that the federal auditor says benefitted private operators by Rs 1.86 lakh crore when Parliament meets on Tuesday after the Eid break.The BJP intends to target PM Manmohan Singh demanding his resignation since he was in charge of the coal ministry during the allocations questioned by the CAG.This is not a matter that can await examination by the PAC.The PM is culpable for the delay in introducing transparent auctions, BJP deputy leader in Rajya Sabha Ravi Shankar Prasad said.The oppositions aggression is likely to be countered by the government with Congress vehemently rejecting the Comptroller and Auditor Generals findings as a bizarre accounting exercise.TNN

WRONG MOVE: PMO had decided in a meeting that changes to the act might be the preferred path to introduce auctions

Admin · Guru

Jaiswal allotted 35 blocks without panels approval

TIMES NEWS NETWORK

New Delhi: Even as coal minister Sriprakash Jaiswal has emerged as one of the UPA governments leading firefighters against the opposition onslaught on irregularities in coal block allocations,his own role in issuing some of these mines have come under the scanner.
BJPs Lok Sabha MP Hansraj Ahir,who has been at the forefront of exposing massive irregularities in coal block allocations,has written to the prime minister accusing Jaiswal of allocating coal blocks to 35 private companies without mandatory sanction by the screening committee.
More importantly,he has alleged that Jaiswal sanctioned coal blocks to three private companies SKS Ispat &Power,CG Sponge Manufacturers Consortium Coalfield and API Ispat & Powertech and a JV of Coal India in late 2011 without any auction,despite the new rules for auction of coal blocks coming into effect in 2010.
I have written to the prime minister demanding an investigation into the allotments undertaken by Jaiswal which were against the law,and in some cases a clear case of economic crime, Ahir told TOI.The PM must discharge his duty by ordering an immediate investigation into the ministers conduct, he added.
When contacted,Jaiswal denied the allegations.The question does not arise.I have not allocated any blocks to anybody, he said.On the allegation that he allocated blocks to four companies without auction,the minister said it was rubbish.
Ahir said the Mines and Minerals (Development and Regulation) Bill,which makes auction mandatory for allocating coal mines,was passed by Parliament in August 2010 and was notified in September in the official gazette.The BJP MP said Jaiswal allotted coal blocks to the three companies in October and November 2011,after the new rule had come into effect.

Admin · Guru

COAL WAR HOTS UP
CAG likely to pitch for scrapping of all coal block allocations

Auditor May Cite Lack Of Clarity By Screening Panel

Pradeep Thakur TNN

New Delhi: The Comptroller and Auditor General is likely to make a strong pitch for scrapping all controversial allocations of coal mines during its presentation to Parliaments Public Accounts Committee.
Sources said the auditor looked set to cite a total lack of transparency in the recommendations made by the screening committee for allocation of coal blocks worth thousands of crores.In its presentation to the PAC likely next week,CAG is planning to show how the committee failed to make any comparative evaluation of applicants,thus establishing that allocations were influenced by extraneous considerations.
There is nothing in the records we have painstakingly examined to suggest otherwise, said a source familiar with the details of the presentation readied for what is going to be a crucial session of the parliamentary panel.
The eligibility of applicants was not examined either,sources said.A test check on companies which got the mines showed that there was little to distinguish these from those who failed to pass muster.
Sources confirmed that there was a strong ground for the government to cancel the allocations.
Apart from other things,there are instances of allocations of mines being withdrawn on the ground of nonperformance a consideration which is relevant in the current case as by the governments own admission,only one of the 57 mines in question had been operationalized.
The guidelines of the coal ministry provide that captive blocks should commence production within 36 months from the date of allocation in case of open cast mines and 48 months for underground mines.
The BJP,the Left and the BJD have demanded revocation of the controversial allocations.
The Public Accounts Committee is likely to schedule discussions on the CAG report on Coalgate as early as next week.

Junior coal ministers in UPA-1 escape scrutiny

Wthe ith the Prime opposition Minister focus,two firmly on protagonists of the coal block allocation Dasari Narayana Rao and Santosh Bagrodia have managed to stay away from the spotlight.Rao and Bagrodia were coal ministers in UPA-1 and are seen to have played a key role in allocations during the period.P 12

Sonia takes on BJP for Parliament blockade

CWednesday ongress chief accused Sonia Gandhi the BJP on of blackmailing Parliament,saying its attitude had made a mockery of the vision of the founding fathers.She said,The proper forum for this (discussion on CAG report) is an active and involved Parliament,not one that is held to ransom by blackmail. P 12

BLACKMAIL HAS BECOME THE BREAD AND BUTTER OF BJP

SONIA GANDHI

WE WANT TO KNOW WHO TOOK MOTA MAAL FROM REDDY BROS OF KARNATAKA

LALU PRASAD YADAV

CONGRESS GOT MOTA MAAL FROM REDDY BROTHERS AS CONG CHIEF MINISTERS GAVE THEM MINING RIGHTS

SUSHMA SWARAJ

Admin · Guru

Govts defence strengthens our arguments,says CAG

New Delhi: The Comptroller and Auditor General is set to pitch for scrapping of controversial allocations of coal mines.The Public Accounts Committee is likely to schedule discussions on the CAG report on Coalgate as early as next week.
The CAGs bold plan to defend its report comes in the wake of strident attacks from Congress.On Monday,Prime Minister Manmohan Singh had rejected the CAGs findings,suggesting it had erred in estimating gains for private players.Singh also said the auditors views were at odds with the requirements of parliamentary democracy and a federal polity.
Sources in the auditor said the defence put forward by the government why the mines have not been operationalized has strengthened CAGs argument that many companies picked by the screening committee had just hoarded the natural resource to boost their valuation at a future date.The parallel with the 2G spectrum scam is striking, said another source in CAG.
Their only objective was to wait and wait and reap windfall gain at a later stage as coal prices,both domestic and imported,were rising, a CAG official said.The PAC meeting,set to be a tumultuous affair,will add to worries of a government which has spent the last 10 days trying to prevent BJP from feasting on the auditors findings.
Sources said the government will have to marshal all its persuasive skills to defend individual allocations.

Admin · Guru

Govt misused power to acquire land

Cgarh HC Cancels SKS Land Acquisition Saying Power Projects Didnt Constitute Public Purpose

Supriya Sharma TNN

New Delhi: The Chhattisgarh high court has quashed a land acquisition order by the state government for four power projects,including a project of SKS Ispat and Power Ltd,the company under a cloud for its links with Union minister Subodh Kant Sahai.
Justice Prashant Mishra held on Tuesday that the state government had misused its powers of eminent domain to acquire land since the coalbased power projects did not constitute public purpose.The court called the acquisition a colourable exercise of power and asked Chhattisgarh government to pay Rs 5,000 each as damages to each petitioner.
The order is significant in the context of the current furore over private companies getting access to coal blocks for free.It shows that the same companies also got access to land for cheap,facilitated by the state government, said Sanjay Kumar,who appeared on behalf of 62 farmers from Siladih and Birra villages where the government has acquired 790 acres of land for Moser Baer's 1320 MW power project,and also two petitioners from Akaltara village where KSK Energy is setting up a 3600 MW project.
Eight separate petitions had been filed by 100-odd villagers who stood to lose their land in Raigarh and Janjgir Champa districts to four companies - SKS Power,KSK Energy,Moser Baer and Visa Power.
The companies did not negotiate with farmers.They simply signed agreements with the government informing them of the location where they wanted land, said Hamida Siddiqui,who represented petitioners from Deori and Dumarpali village who lost land to Visa Power.The state government,in turn,issued a notification stating it was acquiring land for 'industrial use',keeping the villagers in dark about the actual project or company, said Harsh Wardhan,the lawyer who represented 29 villagers from Binjkot village in Raigarh,where 357 acres of land was transferred to SKS Power.
The land was officially acquired in the name of Chhattisgarh State Industrial Corporation (CSIDC) which leased it out to the companies.The project's life is 25 years but the lease was signed for 99 years,effectively transferring the land to the company, said Sanjay Kumar.
In an emailed response,Moser Baer said it had paid advance premium to CSIDC for the land but till date no land has been leased out.The state had initiated process of acquisition as per the previaling industrial policy of the state, it said.

Essar: Nav Bharat acquired legally

Essar Power Ltdhas claimed that the acquisition of Nav Bharat Power was above board and there was nothing illegal about it.Essar Power acquired 100% equity of Nav Bharat Power in two tranches in July 2010 and April 2011 for a total consideration of around Rs 230 crore,the firm said.The entire acquisition was carried out in a transparent manner with independent financial and legal advisors assisting the company in the process of acquisition.Essar Power categorically denies allegations which have been voiced in certain media reports based on unidentified sources that Nav Bharat was a front company of Essar, the statement said.Following the acquisition,Essar Power invested more than Rs 500 crore in developing the project and had also achieved financial closure,the statement said.Navabharat Power,promoted by Hyderabad-based businessman P Trivikram Prasad and ex-CEO of Lanco Power Y Harish Chandra Prasad,was allotted a coal block in January 2008,three years before the acquisition by Essar was concluded,it said.TNN

CROSSING THE LINE

Admin · Guru

Companies faked their financial status: CBI

Neeraj Chauhan TNN

New Delhi:The CBI has found that the private companies named in the first set of Coalgate FIRs misrepresented their financial status by claiming association of different companies.Nav Bharat Power Private Limited,in fact,showed two foreign companies Singapore-based Globeleq and North America-based Suez Energy International in its joint venture (JV) group,sources said.Nav Bharat Power Private Ltd,while applying for coal blocks in Odisha,had given the MoU between the company and Globeleq showing the turnover as Rs 2,500 crore.But the screening committee meeting had not happened.The MoU was reportedly valid for 90 days but it got terminated.Then (at screening stage),Nav Bharat showed Suez Energy International as its JV firm having a net worth of Rs 1 lakh crore, CBI sources said.
In Nav Bharats case,CBI also suspects that Trivikrama Prasad and Harish Chandra Prasad had applied for the blocks but they probably did not have any intention of setting up an end-user facility there.CBI sources said they will contact Globeleq and Suez Energy to ascertain if they had any JV with Nav Bharat Power,which was allocated Rampia and the dipside of the Rampia coal blocks in Odisha.
The agency also claimed that the Prasad brothers sold a major stake of their company to Essar Power after getting the coal blocks and made a profit of close to Rs 200 crore,as first reported byTOIon Wednesday.

Scrap 194 coal block allotments: PIL in SC

T he Coalgate scam has now reached the SC with a PIL seeking cancellation of 194 coal blocks allegedly allotted arbitrarily during 2004-2011 in Jharkhand,Chhattisgarh,Maharashtra,West Bengal,Odisha and Madhya Pradesh.Listing 57 private firms,advocate M L Sharma in his petition challenged governments decision,claiming that 194 coal blocks were allotted almost free of cost.In the allocation of coal blocks in arbitrary manner,the public and national interest was given a go-by and the private companies were favoured in return of securing undue advantages from them, he alleged.PTI

Govt official was in touch with Dardas,says CBI

Neeraj Chauhan TNN

New Delhi: CBI sources on Wednesday claimed that a coal ministry official was allegedly in touch with the Dardas at the time of consideration of their application for coal blocks while saying that they will question MP Vijay Darda after the Parliament session is over.Other accused,including Rajendra Darda,Devendra Darda and the Jayaswals will also be questioned soon,sources said.
Giving details of the modus operandi adopted by the Dardas and the Jayaswals,CBI sources said,When the Jayaswals decided to take coal blocks,they did not have enough funds.Ministry guidelines stated that the company applying for blocks should have enough power generation networks.So,the Jayaswals approached the Dardas,who were also short of funds.
Now,they approached two financial companies Infrastructure Leasing and Financial Services (IL&FS) and Infrastructure Development Finance Company (IDFC) for assistance and told them that they were working on a project.They told the two companies that if they were provided loans,they would make the two companies major equity holders and took an authorization letter from these two financial companies.They added these two institutions worth to their net worth and showed their eligibility in their coal block application.
Interestingly,according to the CBI,coal ministry officials did not properly verify the documents submitted by these three companies.
Officials said they will investigate which coal ministry official was in touch with the Dardas during the process.

Wont resign,not been asked to quit

A day after the CBI registered a criminal case against him for his alleged involvement in the multi-crore Coalgate scam,high profile Maharashtra school education minister Rajendra Darda on Wednesday said has not resigned or been asked to quit.I have not resigned and neither has the party high command asked me to quit the cabinet in view of the FIR lodged by the CBI, Darda told TOI.Since morning,I am with chief minister Prithviraj Chavan for the Teachers Day events in Nashik and nearby areas.I have discussed the entire coal episode with Chavan.So far,I have no instructions to quit, Darda said.TNN

Admin · Guru

CAG crucial body,gives feedback to nation: Nath

TIMES NEWS NETWORK

New Delhi:At a time when UPA ministers are defending the government on Coalgate by criticising the Comptroller and Auditor Generals (CAG) recent audit reports,urban development minister Kamal Nath was full of praise for the auditor and said it was an important institution providing continuous feedback to the nation.
CAG in India has very important function in our system of governance and his role in providing a continuous feedback to the nation by financial audit,performance audit and compliance audit are extremely important, Nath said in the presence of CAG Vinod Rai at a seminar hosted by them jointly in the Capital on performance of urban local bodies.
He suggested that there was no breakdown of communication between CAG and the government over its critical report on the coal block allocation.The communication between CAG and the audited entity is an ongoing process and CAG and the audited entity appreciate each others goals and responsibility, Nath said.
The urban development ministers conciliatory approach was contrary to the aggressive stand adopted by some of his Cabinet colleagues against the auditor after the report on coal block allocations was submitted to Parliament.
Some UPA ministers and senior Congress leaders accused the CAG of exceeding its mandate by putting a loss figure in its audit reports and for producing motivated reports and having political ambitions.
Speaking on the occasion,Rai expressed concern at lack of accountability in urban local bodies where the government is pumping in thousands of crores as development expenditure.
While a number of them have audited accounts available till fiscal 2010-11,in quite a few,audited accounts are pending for a number of years, he said.

Admin · Guru

Panel blames PM for Goa mining scam

Clearances Violated The Norms,It Says

Nitin Sethi TNN

New Delhi: The Justice M B Shah Commissions indictment of the Union environment ministry for disregarding norms and Supreme Court orders to give clearances that facilitated rampant iron ore mining in Goa covers the period when PM Manmohan Singh held charge of the environment portfolio.
The commissions censure of authorities for letting the mines function for more than half a decade in violation of norms for environment protection applies to the two-year spell from May 17,2007,to May 27,2009 when Singh was in charge of the ministry.He was assisted by two ministers of state Congresss Namo Narain Meena and DMKs S Raghupathy.This was the period between the tenures of two Cabinet ministers A Raja and Jairam Ramesh.
The Justice M B Shah Commission recommended strong action against the authorities who failed to rein in the illegal iron ore mining in Goa.Action be initiated against all the officials,secretaries and minister who are involved in such approvals, the Commission said.
Significantly,the Union ministry of mines in its Action Taken Report has asked the environment ministry to take action against the authorities,including ministers,involved.

TALE OF TWO SCAMS

Karnataka Lokayukta estimated the value of 2,98,60,647 MT of illicit iron ore exported between 2006-07 and 2010,at 1,22,28,14,22,854 ( 12,228 cr) The Shah commission has said that keeping average export cost at $60 per MT from 2006 to 2011,with a conversion rate of 47 per US dollar,the total loss to Goa is 3,49,35,92,88,000 ( 34,935 cr) In Karnataka 8,000ha of forest land diverted for mining;in Goa 11,000ha diverted.Figures arrived at after inspecting 90 leases in Karnataka and 124 leases in Goa

Goa allows trade of illegal ore,opens up dumps

The temporary suspension of mining operations in Goa will have little impact as the Manohar Parrikar government has allowed the trade of already extracted ore that has been termed illegal by the panel.It has also advocated extraction and export from existing mining dumps which by some estimates are pegged at 700 million tonnes and contain low grade ore which will invite miners given the high international iron ore rates.

Admin · Guru

Former coal mins bro got 23,000cr mining contract

Won Bid At The Expense Of PSU Under Bagrodia

Josy Joseph TNN

New Delhi: Between 2006 and 2010,PSU power giant National Thermal Power Corporation 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,that reported directly to Bagrodia.
Bagrodia,a former Rajya Sabha MP from Rajasthan,was the minister of state for coal,with Prime Minister Manmohan Singh as the cabinet minister,between April 2008 and May 2009.The commercial bid submission,regarded as a crucial step in awarding the contract,happened when Bagrodia was in office.

Fate of Sahai,Jaiswal uncertain

The continuation of tourism minister Subodh Kant Sahai and coal minister Sriprakash Jaiswal in the cabinet looks uncertain after the Coalgate revelation,with Congress chief Sonia Gandhi likely to bring up the issue this month while discussing the restructuring of the party.

Admin · Guru

SC: No final conclusion based on CAG report

Dhananjay Mahapatra TNN

New Delhi:The UPA government could find ammunition to counter Opposition barbs on Coalgate in an observation made by the Supreme Court one cannot reach final conclusion on the basis of CAGs report while dismissing a PIL that relied heavily on a CAG report on irregularities in privatization of Delhi and Mumbai airports.
Citing CAGs report,petitioner M L Sharma had questioned the unfettered permission given to the private contractors to collect various levy from passengers and commercially exploit the area inside airports.
But,a bench of Justices RM Lodha and A R Dave said,The CAG report will be examined by the PAC and then debated in Parliament.One cannot reach final conclusion on the basis of CAG report.It also objected to Sharma trying to blame former civil aviation minister Praful Patel for wrong doings.

Bhushan to file PIL for coal block cancellation

SC lawyer Prashant Bhushan will file a PIL next week seeking cancellation of the coal block licences and court monitoring.Bhushan said,We will seek cancellation of licences and monitoring by either an independent special investig- ation team or a court-appointed committee. TNN

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Jayanthis fresh salvo hits at heart of Goas minefields

Suspends Clearances Of 93 Mining Leases

Murari Shetye TNN

Panaji: Following the adverse report by the Shah commission on illegal mining in Goa,the Union environment and forests minister Jayanthi Natarajan on Wednesday announced the suspension of environment clearances given to all 93 functional mining leases in the state.
The orders came a day after TOIs story on how central government had given illegal clearances to Goa iron ore mines even under PM Manmohan Singhs watch between 2007-09 as environment and forests minister.The Commission had noted that the central ministry had overlooked its own regulations to give miners an easy clearance route while state and other central government officials had ignored rampant illegal mining over more than half a decade.
With the suspension of clearances under the Environment Protection Act,Congress also upstaged BJPs state government.CM Manohar Parrikar had two days ago suspended all mining operations and ordered an evaluation of all the documents at the state level.With this order the UPA also ensured that the mines would not be re-opened without a clean chit from the centre.
Making this announcement at a press conference in Panaji,Union environment and forests minister Jayanthi Natarajan said,I am the minister for environment.My mandate is to protect the environment and therefore I am taking action under my mandate.
Natarajan pooh poohed the decision to suspend mining operations terming it a whitewash.The MoEF had suspended eight mines before the state government order.Parrikar is trying to fool the people,she said.
The MoEF move came as a major set back to the mining industry in Goa,particularly the majors,since they were hoping to get clearances from the state government after showing their documents as per state government order.The temporary suspension by the state government would not have bothered miners in the short run with the operations already shut due to rains.But now they would be required to present their case before the Union government.
In what could further hit the mining barons of Goa,sources informed,the Union environment ministry was actively looking into whether it could prevent the already extracted illegal ore from being traded something that the state government has permitted in its order.
Natarajan said Since the CM (Manohar Parrikar) has done something utterly meaningless and trying to fool the people of the state and the country,I will do something meaningful.I will not cancel but suspend the environment clearances in the wake of what has happened.We will study whether the mines are operating legally or illegally.Once the officials are satisfied that the environment clearances given to them are valid,we will allow them to continue to operate,Natarajan said.

4 big groups gained 75k cr from coal block allocations

The top 10 beneficiaries of coal block allocations together cornered windfall gains of Rs 1,13,000 crore as calculated by the CAG in its Coalgate report.
Tata group companies benefitted the most with over 2,000 million tonnes of geological reserves accruing to them through allocations of open cast mines valued at Rs 29,000 crore.The second highest benefit went to Naveen Jindal group companies with gains of an estimated Rs 24,000 crore.
Four major groups Tatas,Naveen Jindal,Bhushan (Brij Bhushan) and Abhijit group,headed by Manoj Jayaswal cornered mines with reserves of over 5,600 million tonnes worth Rs 75,000 crore.
Others who managed a big pie include the Pradeep Kumar Khaitan-led Electrosteel group,the Adhunik group of Mahadeo Prasad Agarwal,the S R Rungta group and the Sajjan Jindal group.Each of them managed to get open cast mines with geological reserves of 500 million tonnes and above valued at anywhere between Rs 5,000 crore and Rs 8,000 crore each.
Interestingly,some of these companies were favoured by taking away explored mines from Coal India Ltd (CIL) and given to them on the advice of the prime minister-constituted Energy Coordination Committee (ECC).TNN

ENVIRONMENTALLY UNSOUND

Mining company submits Form 1 to MoEF MoEFs expert panel issues terms of reference on a caseby-case basis to conduct EIA EIA depends on whether the mining site is near a forest,river,sanctuary or protected area;for all of which an EC cannot be issued.Many mines in Goa operate within a 1.5km radius of wildlife areas and sanctuaries.MoEF has proposed a 10km buffer zone After EIA,public hearing is held by Goa pollution board EAC makes suggestions to MoEF on EC grant File moves to MoEF for order

Admin · Guru

Missing detail in coal records haunts Centre

Rajeev Deshpande TNN

New Delhi: The mystery of the missing detail in official files on why some coal block applicants won while others lost out is proving to be the biggest hurdle in the Centres bid to ward off the threat of the Supreme Court scrapping all allocations.
Aware that an unfavourable verdict on Coalgate will be a body blow to its bid to push-start the economy,the government is planning a careful defence that candidly admits to aberrations but strongly argues coal block allocations under UPAs watch are largely untainted.
The thin ice the government needs to negotiate is the crucial 35and 36meetings of the screening committee that recommended allotment of blocks that fail to disclose the logic of comparative evaluation in the allocations,opening the Centre to the charge of arbitrariness.
Sources said the government is likely to make the point that there were criteria such as enduse status,financials,land and water resources in assessing serious players.If a certain private operator was selected,the application was not deficient even though another might have been equally worthy.
It will claim there was a method to the allocation process even if results were not always desirable.In explaining difficult cases,the Centre will point to the need to accommodate preferences of the states in the allocation process as their approval is essential for mining operations.On the SCs question regarding the influential bagging coal blocks,the government hopes to say that these were few in number and were also being screened by an inter-ministerial committee.
Six questions the SC has posed while hearing a PIL include why competitive bidding was not followed and if guidelines were violated rendering the allocation process arbitrary and open to malafide.If the government fails to provide satisfactory answers,it runs the risk of coal allocations going the 2G way.At a time when the government is straining every sinew to bump up coal production and power generation,scrapping of coal allocations can set the clock back irretrievably as the political calendar recently referred to by Prime Minister Manmohan Singh ticks away.
Rather than the dodgy allocations,it is the slack procedures adopted by the screening committee that are giving the government a headache.

If govt fails to provide answers,it runs the risk of coal allocations going the 2G way

Admin · Guru

Congmen allege 4 lakh cr mining scam in Odisha

Say CM Naveen Patnaik Must Resign And Face Trial

TIMES NEWS NETWORK

New Delhi: Congress leaders from Odisha have accused chief minister Naveen Patnaik of presiding over a Rs 4 lakh crore mining scam,saying the recently imposed fines of Rs 58,000 crore on iron ore firms were to preempt being caught by the Justice Shahinquiry.
Union minister Srikant Jena told reporters that sudden levying of fines on mining firms for violations was admission of illegality prevalent in the sector.Obviously,it has not happenedovernight,ithasbeen going on for 10 years.The CM has now imposed fines to show that action was being taken becauseJustice Shahcommission is probing in thestate, hesaid.
Flanked by MP Bhakta Charan Das,AICC secretary Jayadev Jena and other state leaders,Srikant Jena said Patnaikshould resign andfacetrial for criminalconspiracy,in what may mark the breach of the much-speculated understanding between thetwosides.
Jenas salvo came against thebackdrop of persistentspeculation thatCongresshasdecidedto goeasy on the allocation of coalblocksunder Patnaikin exchange for possible support from the BJD in any showdown in Parliament over the decision to allow FDI in multi-brand retail.Jena faced a barrage of questions on why Congress leadership was soft on Patnaik when itwasunsparing on other rivals like B S Yeddyurappa for mining irregularities.
The Union minister was repeatedly askedif Congressskid glove treatment of the Odisha CM was because of his 14 Lok Sabha MPswhocouldbeof help in Parliament.Jena denied the assumptions and blamed it on Patnaikssocialfinesse.
Yeddyurappa is rustic in style but Patnaik is trained in Delhi.He looks innocent from outside but is very cruel inside.Even national press overlooks Odisha, hesaid.
Although Jena and other Congress leaders took pains to stress that they were speaking in their individual capacities,the aggression is unlikely to go down well with the BJD.Jena said,Thisloothasbeen deliberate and calculated,meticulously plannedduetothecollusion of theCMwith mining operators.
Odisha Congress chief Niranjan Patnaik wondered why the CM was not ready for a CBI probe if he was confident of his innocence.The abrupt action like fine on miners stems from the fear that Shah inquiry will expose coalgate in iron ore, he said.
Niranjan Patnaik alleged the CM allotted a coal block in 2003 to Orissa Mining Corporation which entered into an agreement with a private firm which was given 74% stake.He alleged the private company wasownedby a relativeof a former BJPleader.
The Centre in 2008 found it illegalthatOMCenteredinto an agreement with a private firm.The agreement was cancelled last month,after so many years.Why istheCMwaking up now, he asked.

Admin · Guru

Sanchettis coal block back to haunt BJP

Altough De-Allocated Now,Chhattisgarh Gave Block To Firm Which Didnt Qualify For It In First Place

Supriya Sharma TNN

New Delhi: BJPs internal strife over allegations of graft is likely to grow sharper as a de-allocated coal block returns to haunt it.While Bhatgaon coal block features in the list of blocks de-allocated this week,reportedly since it was not developed in time,new evidence shows the firm selected by Chhattisgarhs BJP government to develop it did not qualify for the job in the first place.
The firm,SMS Infrastructure,is owned by Ajay Sancheti,a Nagpur-based businessman and BJP Rajya Sabha MP,who is a close associate of party president Nitin Gadkari.The case of Bhatgaon coal block made a brief cameo during Coalgate when it was reported that the CAG had pulled up the Chhattisgarh government for selecting SMS Infrastructure,Sanchetis firm,as a mining partner through a bidding process in 2008 despite the firm offering abnormally low rates.
The firm had quoted a price of 360% above the minimum rate,or Rs 552 per metric tonne,for one part of the block - Bhatgaon II while for the second part Bhatgaon II Extension it quoted just 8% above the minimum rate or Rs 129.60 per metric tonne.The price differential a good 352% or Rs 423 per metric tonne - would result in a loss of Rs 1052 crores for the state,the CAG audit report had calculated.(See box)
In its defence to the CAG,the state government justified the differential price by claiming that Bhatgaon II had superior quality coal than Extension,and that mining the latter involved higher costs.
But an examination of the geological reports,mining plans and bid documents does not validate the governments defence.It also reveals deeper flaws in the process,the most damning being that Sancheti-owned SMS Infrastructure did not qualify in the first place.It did not have three years of experience in underground mining,which was a pre-condition for the applicants.
The Bhatgaon coal block lies in Surguja district in north Chhattisgarh.It has an area of 33.63 sq kms,with 80.10 million tonnes of mineable reserves.The coal ministry allotted the block to the state mining company,Chhattisgarh Mineral Development Corporation (CMDC),on July 25,2007.Next year,CMDC decided to look for a private sector partner that would mine the block and sell the coal in the commercial market,paying it a service fee in return.
Accordingly,CMDC invited competitive bids,laying down the minimum service fee as 100% of royalty for Grade D coal and asking companies to bid above that.It also specified technical criteria : only those companies that had a minimum of three years experience of extracting /mining of coal from underground mines would be considered eligible.And in a curious move,it split the block into two blocks Bhatgaon II and Bhatgaon II Extension inviting applications for each separately.
As many as 34 companies bought the application forms.But only five companies submitted bids for Bhatgaon II and two companies for Extension.
Before the bids were opened,they were vetted to see if they met the eligibility criteria.Of the five companies that had applied for Bhatgaon II,CMDC said only two had qualified Jindal Steel & Power Ltd and SMS Infrastructure.In the case of Extension,CMDC found that only SMS Infrastructure had made the cut.
When the bids were opened,it was found that JSPL had quoted a price of 350% above the minimum rate for Bhatgaon II,while SMS Infrastructure narrowly exceeded it by quoting 360%.And SMS Infrastructure anticipated the absence of competition for Extension to quote a price of just 8% above the minimum rate.
CAG found the process suspect and said that CMDC should have either extended the tender opening date or reinvited the tenders for Extension to generate fair competition instead of justifying the low rate quoted by the lone bidder. As justification,CMDC gave CAG a report from its coal advisor,N P Bhatti,which said Bhatgaon II had superior quality coal 75% of its coal was high quality Grade B-D compared to Extension which had 85% of low quality Grade D-E coal.
CAG dismissed Bhatts opinion as that of a private consultant,while relying on the blocks detailed geological report prepared by the Government,which showed that 55% of the coal in Extension was the highest quality Grade A-C,which as the CAG pointed out,is scarce and highly priced.Even SMS Infrastructure admitted as much: while seeking environmental clearance,it had submitted a mining plan that said 57% of the coal in Extension was Grade A-C.
The CAG also dismissed CMDCs argument that extracting coal from Extension would be costlier as the coal seams were underground.Once again,it quoted from the blocks geological report that showed 90-95 % of the coal was extractable through the open cast method.In fact,taken together,just 6% of the coal in the entire block required underground mining.Subsequently,the government has claimed that proximity to a river also adds to the mining costs of Extension,but the geological maps seen by TOI indicate the rivers influence is confined to a very thin slice of the block.
While the CAG rejected the justification for SMS Infrastructure quoting vastly different prices for contiguous blocks with similar quality coal,it did not probe the more fundamental question: did SMS Infrastructure,primarily a civil construction company,qualify in the first place Did it have three years of underground mining experience that was laid down in the technical eligibility criteria approved by CMDCs managing director in a note dated 2 July 2008
In a series of responses to TOIs emailed queries,Chhattisgarh government said it is true that such a pre-condition existed,but maintained that SMS Infrastructure had submitted documentary evidence of sufficient mining experience.
TOI has examined the documents submitted by the company as part of its bid offer,which was made through a joint venture with Solar Explosives Ltd,a company that specializes in manufacturing explosives.To support its claims that it had three years of experience in underground mining,SMS Infrastructure submitted five work completion certificates from four underground mines.
Awork completion certificate from Western Coalfields (WCL) showed Sanchetis firm had earned Rs 24 lakhs for constructing a mechanized drivage and staple pit in Kumbarkhani Underground mine work completed over five months ending in 2007.Another certificate from WCL shows the company had executed a contract worth Rs 1.13 crore to construct a drivage of a vertical air shaft,fan drift and fan house at Sasti Mine work completed over five years ending in 2006.Both the certificates were for construction work and not actual mining,let alone underground mining.
While the other certificates related to underground mining,they fell drastically short of the three-year requirement.
The company had won a contract to produce 1.8 lakh metric tonnes of coal per annum from Kumbharkhani mine,but the contract had been signed in late 2006,and the work had lasted just 10 months.Similarly,the firm had bagged a Rs 6-crore contract to produce 1.80 lakh metric tonnes of coal per annum in Rani Atari mine,but the contract had been signed in December 2007,and the work had gone on for just two months.The final certificate from Uranium Corporation of India showed just 6 months of work in Andhra Pradesh.
Why did CMDC overlook SMS Infrastructures lack of requisite experience CMDCs internal correspondence during the final stages of selection in August 2008 contains a telling amendment: a printed line stating that CMDC has vetted the documents of SMS Infrastructure has been erased and overwritten by a scribble that says the documents have been vetted by a consultant.

CAG CALCULATION

Calculated using undue benefit formula,the gain to Sancheti firm more than doubles
The CAG at the state level computed the difference between the price quoted for Bhatgaon II and the price quoted for Extension to arrive at a loss figure of Rs 1,052 crore
But if you go by the formula used by CAG at the national level to calculate undue benefit to coal block beneficiaries by subtracting cost of mining from the value of mineable reserves the total loss to the national exchequer on account of Bhatgaon block comes to approx Rs 4,950 cr.As the holder of 49% stake as mining partner,SMS Infrastructure would stand to pocket half of the amount,or approx Rs 2,475 cr