CAG report flawed, disputable: PM

NEW DELHI, August 27, 2012



Prime Minister Manmohan Singh on Monday attacked the Comptroller and Auditor-General's report on the coal blocks allocation during 2004-09, saying any allegation of impropriety was without basis and unsupported by facts.



As Parliament has been paralysed during the past week with an unrelenting and combative Bharatiya Janata Party disrupting proceedings in both Houses and demanding his resignation, Dr. Singh chose to make a statement in Parliament, but was shouted down by BJP members.



He had barely begun reading his 32-point statement when it was drowned in the din and he had to lay it on the table.



Taking full responsibility — as the Minister in charge then — for the Coal Ministry's decisions during the time covered in the report, Dr. Singh said the CAG's observation that there was a financial gain of about Rs. 1.86 lakh crore to private parties was "clearly disputable."



He sought to take the battle into the Opposition camp and blamed the Opposition-ruled States for resisting the proposed change to competitive bidding. Dr. Singh said major coal- and lignite-bearing States such as West Bengal, Chhattisgarh, Jharkhand, Orissa and Rajasthan, ruled by the Opposition parties, were strongly opposed to the switchover.



These States felt that competitive bidding would increase the cost of coal, adversely impact value-addition and development of industries and dilute their prerogative in the selection of lessees.



Dr. Singh pointed out that the Coal Mines Nationalisation (Amendment) Bill, 2000, aimed at facilitating commercial mining by private companies, had been pending in Parliament for long, owing to stiff opposition from the stakeholders. He termed "flawed" the CAG premise that competitive bidding could have been introduced in 2006 by amending the existing administrative instructions.



The CAG's observation, he said, was based on a "selective reading of the opinions given by the Department of Legal Affairs."



Dealing with the CAG's key observations point by point, Dr. Singh said that even if the government auditor's contention that benefits accrued to private companies was accepted, "their computations can be questioned on a number of technical points."



He said the policy of coal blocks allocation to private parties was not a new one introduced by his government. It had existed since 1993 and previous governments also allocated coal blocks in the same manner.



The private parties allocated captive coal blocks could not achieve their production targets partly because of cumbersome processes involved in getting statutory clearances, he said.



The government had initiated action to cancel the allocations of those who did not take adequate follow-up action to begin production. "Moreover, the CBI is... investigating the allegations of malpractices, on the basis of which due action will be taken against wrongdoers, if any."
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