The Prime Minister is likely to make a statement in Parliament today on the recent report by the national auditor that says the country lost Rs 1.86 lakh crore because coal fields were given too cheaply to private and state-run firms. From 2005 to 2009, 142 coal fields were allotted, instead of being auctioned. For a part of this period, the PM held direct charge of the Coal Ministry.
That has given the BJP a direct line of attack on Dr Manmohan Singh. The party stalled both houses of Parliament this morning, forcing an adjournment. "We are not interested in the PM's statement, we just want him to quit," said the BJP's Prakash Javadekar. Last week, after the Comptroller and Auditor General (CAG) presented its report, the BJP said the Prime Minister should "introspect and resign." That demand is "preposterous," reiterated the Congress today. "The PM is ready and will speak," said Parliamentary Affairs Minister Pawan Kumar Bansal. "We are prepared for a discussion. People ought to know the truth and the difference between the myth and reality," he said.
Coal Minister Sriprakash Jaiswal said last week that the calculations of the auditor are incorrect. "The back of the envelope calculations," the government said, ignored basics like the fact that the cost of extracting coal varies from mine to mine. The government has also stressed that revenue was not the main goal - at the time, the surging economy and industry needed coal quickly and the private sector was tapped to augment the capacity of the state-run Coal India Limited. The government has also said that the law at the time did not permit for an auction, and that changing administrative and legal policies would have taken years. But the auditor says that competitive bidding could have been introduced in 2006. The law was finally amended in 2010.
What the BJP has failed to explain is the opposition expressed to an auction by some of the states where it was in power. Rajasthan and Chhattisgarh both wrote letters opposing a bidding process.
The auditor has highlighted that the initial output from mines given to private players was lower than estimated. It has also said that many firms defaulted on basic terms of their contract. For example, it says that of the 86 captive mining blocks, only 28 started production by March 31, 2011. The government will agree that it may have overestimated how quickly and efficiently the private sector could handle production, and that environmental and other clearances took longer than anticipated in many cases.
The CAG, in its report tabled in Parliament, named 25 companies including Essar Power, Hindalco, Tata Steel, Tata Power and Jindal Steel and Power (JSPL) which have got were allotted coal blocks in various states.