The ‘Coalgate’ fire raising for quite some time, seems to have now spread into a VIP area and seems headed to engulf, among others, some truly big guns. The one representing big industrial house of Birlas – KM Birla, the other a former top civil servant, P C Parakh, ex-Coal Secretary and last but not the least, none other than the PMO (by implication the Prime Minister, Manmohan Singh) find themselves in the midst of this fire none had even imagined, and the least as far as the threesome were concerned.
CBI, in a way, seems to be setting itself free – or perhaps giving an impression of doing so – from the status of a ‘caged parrot’, a tag earlier given to it by the Supreme Court. It now also seems to be singing a tune that’s distinctly different from the one earlier played under the direction of ‘his master’s voice’. Suddenly the Central Bureau of Investigation seems to have sort of metamorphosed itself and bringing in, in its wake, the kind of interest and curiosity in the Coalgate scam cases not witnessed earlier. Much of the credit for this, however, should go to the Apex Court for the way it has put its foot down and stamped its authority while monitoring the Coalgate cases.
Talking about the latest CBI FIR involving KM Birla, P C Parakh and the PMO, one thing seems pretty certain that the central investigating agency must have checked and re-checked a thousand times the documentary evidences in its possession before ‘venturing’ to name them, among others. It seems inconceivable otherwise that ahead of throwing its net around the personalities as big as the ones here, the CBI might have lapsed in its concentration and in application of its mind.
Big personalities as the threesome are, they otherwise are also well aware that they are faced with one of the most serious challenges at their very own personal levels given the way the laws of the land, mutatis mutandis, seem to be closing on them. Notwithstanding India Inc as also the political class coming out in full support of KM Birla; the ruling Congress party throwing its weight and support behind Prime Minister Manmohan Singh and the top level bureaucracy attempting to protect its own citadel in the process of defending Parakh, the CBI seems to be sticking on to its own initial finding, at least up till now. Any knowledgeable and discerning observer looking at the way this case has shaped, may not perhaps be agreeable to brush aside the CBI FIR as the one purely bordering on adventurism.
PC Parakh, in his defence, admits that if he, as the then Coal Secretary, is held accountable in this case, then, the then Coal Minister (i.e. Prime Minister who held Coal portfolio as well) is equally accountable. Parakh’s contention seems administratively correct for his proposal to overturn the Coal Ministry’s “Screening Committee” recommendation to accommodate KM Birla’s HINDALCO was approved by the Coal Minister.
KM Birla says he has done nothing wrong while renewing his request for allotment of Talabira II coal block under Mahanadi Coal Limited (MCL) in Odisha for his company HINDALCO and getting it. Originally his company had applied for this particular coal block which wasn’t agreed to and allotted by the Ministry’s Screening Committee and instead, the same was allotted jointly to NLC (Neyveli Lignite Company) in Tamil Nadu and MCL – both central PSUs. On Birla’s renewed request, the same was however, accepted and allotted in his company’s favour. He, in no way, therefore, can be charged with any criminal conspiracy in this case.
PMO, in its turn, has sought to explain its position on behalf of the Prime Minister who as the then Coal Minister had approved the proposal submitted by his Ministry. In addition, the PMO also says that while having a re-look at the request of KM Birla the fact that the then Odisha Chief Minister (Navin Patnaik) under whose jurisdiction the said coal block falls, too had recommended in August 2005 in favour of HINDALCO as a top priority. PMO had asked the Coal Ministry to re-examine the matter in the light of CM’s letter. The Prime Minister had finally endorsed the Coal Ministry’s proposal to overturn the Screening Committee recommendation to accommodate KM Birla’s HINDALCO. This was also necessarily keeping in mind India’s federal democratic polity to conform to – the PMO thus also seems to be suggesting this aspect as an important factor while reviewing an earlier decision, in its report given to the CBI.
However, in order to make an appraisal and appreciation of the whole issue at this stage, the role of the Coal Ministry Screening Committee needs to be elaborated and dealt with at some length. It was in 1992-93 when in the wake of India’s economic reforms measures taking off, the Coal Ministry had conceived of an idea to open up and allocate some of the coal mines to private players also. This was felt so for the reason that Coal India Limited (CIL) and its subsidiary coal companies in various states were then not able to keep pace with the demands for the power grade coal for the coal fired thermal power stations. Additionally, the need for captive thermal power plants that the private companies intended to set up for captive use, was also taken into account.
Under the Coal Mines (Nationalisation) Act, 1973, coal mining was mostly reserved for the public sector. This Act was amended in June 1993 to allow coal mining for captive consumption for generation of power, washing of coal obtained from mines and other end uses to be notified by the government from time to time, in addition to existing provision of captive coal mining for production of iron and steel. This paved the way for private players to enter the coal mining.
Around this time (1992-96), I was posted as Director in the Coal Ministry and happened to have witnessed the launching of the “Screening Committee” for processing of all such applications received from the private companies and other PSUs and make recommendations in each case.
The first ever such Screening Committee had Additional Secretary (Mr B N Makhija, IAS) as its Chairman, and Advisor (Coal Projects) (Mr R K Sachdeo, a Mining Engineer) and a Joint Secretary – as members – all 3 from the Coal Ministry. Other members were drawn from Ministries of Power, Steel, Railways, Environment & Forests and from concerned State Governments apart from Director (Technical) of CIL, Kolkata, CMD, CMPDIL, Ranchi and CMDs of concerned subsidiaries of CIL.
I, as Director in Coal Ministry, assigned to handle the subject of appraisal of coal projects, was there to assist the Screening Committee. If my memory serves me right, this Committee was sort of an empowered committee whose recommendations were to be implemented after the same were duly approved by the competent authority, that is, the Coal Minister. In the event of any query or clarifications or need for any review arising ahead of the final decisions, the same needed to be referred back to this Committee.
In the instant case of Talabira II under MCL in Odisha, the Screening Committee had recommended for its allotment jointly in favour of MCL and NLC – both central PSUs. HINDALCO, the other applicant for this coal block, was not recommended. KM Birla in May, 2005 approached the Prime Minister (who also held Coal portfolio) and impressed upon him the need for this coal block in favour of HINDALCO. In August 2005, Prime Minister received a letter from Chief Minister of Odisha strongly backing the allotment of Talabira II to HINDALCO on ‘top most priority’. The PMO asked the Coal Ministry to re-examine the matter in the light of this letter. On perusing the noting of Coal Secretary, PC Parakh, the Prime Minister finally in October, 2005 endorsed the proposal to overturn the Screening Committee recommendation to accommodate KM Birla’s HINDALCO.
The CBI in the process of its investigation of the Coalgate scam, seems to have picked on in the instant case the procedural lapses whereby the role of the Coal Ministry’s Screening Committee – a body technically competent and empowered to take decisions in the matter – was usurped. This Committee was sort of by-passed by the Coal Secretary as also by the ‘competent authority’, the Coal Minister while reviewing and eventually overturning Committee’s original recommendations. CBI seems to have further construed this as collusive criminal intent and criminal conspiracy and an act of corruption on the part of the three individuals named in the FIR. What CBI seems to be suggesting that ahead of taking a final decision in the instant case, going by the Coal Ministry’s Guidelines on this, the Screening Committee should have necessarily been involved, yet again. This was not done. Instead, circumventing the procedure and rule prescribed in this regard, Screening Committee’s decision was conveniently ignored to extend an undue favour to a private company – that’s how the CBI seems to be viewing the whole issue. PMO, on its part, however, seems to be maintaining this action to be ‘entirely appropriate’ decision having no traces of any criminal conspiracy and corruption whatsoever.
As things stand today, the whole matter seems to be very delicately poised. This being a Supreme Court monitored case, the CBI has submitted to the court this Tuesday, 22nd Oct, 2013, the latest status report concerning the whole lot of Coalgate cases, including the one discussed here. CBI is also reported to have asked the PMO to submit the files relating to allotment of coal blocks to HINDALCO.
Supreme Court is likely to hear further the Coalgate cases on 29th October, 2013. We may keep our fingers crossed till then.