As Parliament reconvenes tomorrow, the Bharatiya Janata Party (BJP) today discussed its strategy to corner the government on the Comptroller and Auditor General's (CAG) report on coal block allocations.
Senior leaders including LK Advani, Sushma Swaraj and Arun Jaitley met this evening with sources saying that the party will stall the proceedings in Parliament. It is also likely to blame Prime Minister Manmohan Singh for the over Rs 1.85 lakh crore "windfall gain" that the private companies which were allotted coal blocks had because of the low prices they paid for the fields. The CAG report says if a plan to introduce competitive bidding or auction had been implemented, the national exchequer would have got part of that money.
The report does not indict the Prime Minister or his office, but the opposition is targeting the Prime Minister. Sources say the BJP will ask the PM to take moral responsibility in coal block allocation and step down. According to sources, the PM is likely to make a statement in Parliament tomorrow.
The CAG report tabled in Parliament on Friday stated that 142 coal fields were allotted to private and state-run firms without transparency and objectivity between 2005 and 2009. The BJP-led opposition says since Prime Minister Manmohan Singh held charge of the coal ministry for part of that period, he should, "introspect and resign."
The government has defended the manner in which it allotted coal blocks to private firms. "There couldn't have been a more transparent means of allocation. We followed an extremely transparent method," Coal Minister Sri Prakash Jaiswal said. Coal India, he said, alone could not have met the country's demand for coal and it was necessary to bring in private players to speed industrialisation and development in the country.
The government argues that when the coal fields were allotted, existing laws did not allow for an auction. Changing policy and administrative processes would have taken several years. The delay would have hurt a surging economy and industry which needed coal. But the auditor says that competitive bidding could have been introduced in 2006. The law was finally amended in 2010.
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.