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There is no scam, only politics: Jaiswal

There is no scam in awarding coal blocks (as alleged by the CAG in its draft report), only politics is being played over the issue, said Coal Minister Sriprakash Jaiswal today in New Delhi.

Speaking to Firstpost, the minister also asserted that the process followed by previous governments, where no auction route was taken to award coal blocks, was the right approach at that time. But given the sky rocketing price of coal now and its immense scarcity, the auction process is the only way forward.

The minister said that 54 new coal blocks are to be auctioned in the next round, his first as a coal minister, and that the auction process should be completed in about four months.

Union Minister for Coal, Sriprakash Jaiswal. Image courtesy PIB

"No scam has happened in this ministry, only politics," Jaiswal said asking the NDA government to explain how 40 coal blocks were given out during their regime (of which 30 were given out under the Atal Bihari Vajpayee Government's tenure).

He said auction did not make sense a decade back because this would have directly led to price increase for the end consumer.

"How can you equate this with the telecom (2G license) scam? Any increase in telecom tariffs because of the auction route does not really impact the poor of this country. Awarding coal blocks is an entirely different matter, there is no comparison," he said.

On the new allocations of 54 blocks, the minister said it has already been ascertained that none of these fall under the "no go" areas defined by the environment ministry.

It is interesting to note that no legislation in India says every natural resource should be sold only through the auction route.

"The latest telecom judgement has started the debate but there is no stipulation that that is the only way to conduct a sale. If it goes in this manner, then all the divestment, where the management of a PSU decides on the valuation , will be open to question. The method a sale is determined by the context and the objectives of the government. There is no conclusive evidence anywhere in the world that auction is the best possible way to sell and maximise revenues from sale of resources," said a private power producer on condition of anonymity.

The 155 blocks of coal under dispute were declared unviable by Coal India before being given out to private players.

"So if you did not allocate the coal to private companies then it would be a dead asset as per governments own specialist organisation," the private producer said.

The Times of India reported in its Thursday edition that CAG had criticised the coal ministry for extending “undue benefits” to over 100 companies by giving them coal blocks without an auction between 2004 and 2009.

However, CAG today wrote to Prime Minister Manmohan Singh expressing “very deep anguish” over the leakage of the initial draft.

The auditor went further and said that “… it is not even our case that the unintended benefit to the allocatee is an equivalent loss to the exchequer.” The letter says CAG has changed its views after its spoke to the coal ministry. “Pursuant to clarification provided by the ministry in exit conferences held on 9.02.2012 and 9.03.2012, we have changed our thinking.”

Updated Date: Mar 22, 2012 19:11 PM