M A I N   N E W S

CAG’s coal observations disputable: PM
Says report flawed, based on selective reading of opinions
Opposition stalls PM’s 32-point response
KV Prasad/TNS

What MANMOHAN SAID Allegations of impropriety are without basis and unsupported by facts Opposition-ruled states — Chhattisgarh, Jharkhand, Orissa, Rajasthan and Bengal — opposed the switch to competitive bidding  It is not appropriate to aggregate purported gains to private parties on the basis of price of coal set by Coal India Limited The government has initiated the process to cancel block allocations to parties that did not take adequate follow-up action to begin production The Coal Mines Nationalisation (Amendment) Bill to facilitate commercial mining is pending in Parliament Circumventing legislative process through administrative order in face of opposition would have been undemocratic It has been my general practice not to respond to motivated criticism directed personally at me... The CBI is separately investigating allegations of malpractices, on the basis of which due action will be taken against wrongdoers, if any  — Manmohan Singh, PM CONG ready to BATTLE it out While an unyielding BJP rejected PM Manmohan Singh’s statement on the CAG report on coal blocks allocation and stuck to its demand for his resignation, the UPA government made it clear that it is prepared to battle it out, having no intention of opting for an early adjournment of the session or moving a trust vote. Not AN attack on CAG: PMO As Prime Minister Manmohan Singh faced criticism for debunking the CAG findings on the allocation of coal blocks, sources in his office said on Monday his statement in Parliament was on a report and not on the constitutional body. Sources in the Prime Minister's Office took pains in the evening to explain that his remarks that the Comptroller and Auditor General's report was “flawed and clearly disputable” concerned the report and not the institution itself. — Agencies

New Delhi, August 27
Seeking to set the record straight on the coal block allocation issue, Prime Minister Manmohan Singh today rejected the Comptroller and Auditor General’s (CAG) reports saying “allegations of impropriety are without basis and unsupported by facts”.

Responding to CAG’s 2004-09 coal block allocation report that said the opaque screening process, absence of bidding system and delay in introduction of competitive bidding resulted in financial gain of Rs 1.86 lakh crore to private parties, the PM said these observations were “clearly disputable”.

He took complete responsibility for the decisions taken by him as the minister in-charge. His attempt to read the 32-point response in Parliament was halted by a vociferous Opposition. The statement was, however, tabled in both Houses.

He said, “It has been my general practice not to respond to motivated criticism directed personally at me. To personal criticism my general attitude has been: Hazaaron jawaabon se acchi hai meri khaamoshi, na jaane kitne sawaalon ki aabroo rakhi (My silence is better than a thousand answers, it keeps intact the honour of innumerable questions).”

In this case, he said he wanted to respond, but was not allowed to. This was his first reaction to a series of charges being levelled against him by the BJP-led Opposition. The government would respond to these in the Public Accounts Committee meeting, the PM said.

Through the chronological narrative, the PM emphasised that the policy switch to competitive bidding from allocation system was mooted by his government in 2004, but it faced opposition from major coal and lignite bearings states — Chhattisgarh, Jharkhand, Orissa, Rajasthan and West Bengal — all ruled by Opposition parties.

Through a letter in April 2005, Rajasthan Chief Minister Vasundhra Raje had opposed competitive bidding. In June the same year, Chhattisgarh CM Raman Singh sought continuation of the existing policy and suggested the change should be effected only after a consensus was reached between the Centre and the states. West Bengal and Orissa also opposed the new system, with the Power Ministry claiming that auctioning would lead to enhanced cost of producing energy.

He termed as “flawed” the CAG observation that competitive bidding could have been introduced in 2006 by amending the existing administrative instructions. He said the observation was “based on a selective reading” of opinions given by the Department of Legal Affairs (DLA).

In August 2006, the DLA said competitive bidding could be introduced through administrative instructions, but it also expressed the opinion that legislative amendments would be need to place it on sound legal footing. Later, it categorically stated that amending the Mines and Minerals (Development and Regulation) Act would be the way out, the PM said.

He said the Coal Mines Nationalisation (Amendment) Bill to facilitate commercial mining by private companies was still pending in Parliament due to stiff opposition from stakeholders.

On the CAG’s suggestion that the government should have circumvented the legislative process through administrative instructions, he said, if implemented, it would have been “undemocratic and contrary to the spirit of the functioning of our federal polity”.

On the criticism that competitive bidding decision was not implemented swiftly, he said: “In a world where things can be done by fiat, we could have done it faster. But, given the complexities of the process of consensus-building in our parliamentary system, this is easier said than done.”

He asserted that aggregating the “purported gains” to private parties “merely on the basis of the average production costs and sale price of CIL (Coal India Limited) could be highly misleading”.

He also said that the government had already initiated the process to cancel coal block allocations to the private parties that did not take adequate follow-up action to commence production. “Moreover, the CBI is separately investigating the allegations of malpractices, on the basis of which due action will be taken against wrongdoers, if any,” he said.