Refusing to be on the back foot on coal block allocation, Prime Minister Manmohan Singh on Monday rejected the CAG's observations as "misleading" and "flawed" and blamed Opposition parties for thwarting his government's efforts to bring a policy of competitive bidding.
Speaking inside Parliament as well as outside, he took"full responsibility" for the decisions taken by the Coal Ministrywhose charge he directly held for some time and asserted that at "anyallegation of impropriety is without any basis and unsupported by facts".
He attacked BJP for disrupting Parliament and dared it tohave a debate in the House to let the country judge the truth while declaringthat "we have a very strong and credible case" as CAG's"observations" are "clearly disputable".
In both Houses, BJP chanted demands for his resignation asSingh rose to speak. As a result, he read out a few portions of his four-pagestatement before laying it in Lok Sabha and Rajya Sabha which were repeatedlyadjourned.
Conscious that the CAG reports are normally discussed inParliament's Public Accounts Committee where the ministry concerned responds,he said he was departing from this established procedure "because of thenature of the allegations that are being made and because I was holding thecharge of Coal Minister for a part of the time covered by the report."
Responding point-by-point to the observations of the CAGwhich had pegged the loss at Rs 1.86 lakh crore, he said even if the governmentauditor's contention that benefits accrued to private companies were accepted,"their computations can be questioned on a number of technicalpoints."
He asserted that aggregating the "purported gains"to private parties "merely on the basis of the average production costsand sale price of CIL (Coal India Limited) could be highly misleading.”
The Prime Minister termed as "flawed" the premiseof the CAG that the competitive bidding could have been introduced in 2006 byamending the existing administrative instructions, saying it is "based ona selective reading" of opinions given by the Department of Legal Affairs.
As coal blocks were allocated to private companies only forcaptive purposes for specified end-uses, it would not be appropriate to linkthe allocated blocks to the price of coal set by CIL, he said.
Facing BJP demand for his resignation, Singh sought tocorner the Opposition saying the policy of allocating coal blocks withoutcompetitive bidding existed since 1993 and previous governments also allocated"precisely in the manner that the CAG has criticised".
He also said major coal and ignite bearing states like WestBengal, Chhattisgarh, Jharkhand, Orissa and Rajasthan "ruled by Oppositionparties" were "strongly opposed" to a switch over to competitivebidding process.
On the charge of delay in bringing the Coal MinesNationalisation (Amendment) Bill, 2000, to facilitate commercial mining byprivate companies, he said it was pending in Parliament for a long time owingto "stiff opposition from the stakeholders" and government wantedbroader consultations and consensus.
Singh said these state governments felt that a switch overwould increase the cost of coal, adversely impact value addition anddevelopment of industries in their areas and dilute their prerogative in theselection of leases.
He said the issue was "contentious" and theproposed change to competitive bidding required consensus building amongvarious stakeholders with divergent views, which is inherent in the legislativeprocess.
Citing instances, he said the then BJP Chief Minister of RajasthanVasundhara Raje had written to him in April 2005 opposing competitive biddingand arguing that it was against the spirit of the Sarkaria Commissionrecommendations.
The Prime Minister named another BJP Chief Minister RamanSingh (Chhattisgarh) saying he had written to him in June 2005 seekingcontinuation of the extant policy of coal block allocation.
He said the Chhattisgarh Chief Minister had requested thatany change in coal policy be made after arriving at a consensus between thecentral government and the states.
"The state governments of West Bengal (Left) and Orissa(BJD-led) also wrote formally opposing a change to the system of competitivebidding," Singh said.
The coal block allocation could not be held back tillconsensus was arrived at as it could affect GDP growth, the Prime Ministersaid.
"It is unfortunate that the CAG has not taken theseaspects into account," he said.
Singh said the government has initiated action to cancel theallocations of allottees who did not take adequate follow-up action to commenceproduction and promised "due action against wrong doers" on the basisof the on-going CBI investigations into the allegations of malpractices.
He said it has always been the intention of the governmentto augment coal production by making available coal blocks for captive miningthrough transparent processes and guidelines, which fully took into account thelegitimate concerns of all stakeholders, including the state governments.
He said the government had initiated a proposal to introducecompetitive bidding by formulating appropriate rules but coal and ignitebearing states voiced their opposition to the proposed switch over in a meetingconvened by the PMO on July 25, 2005.
It was, therefore, decided in the meeting to "continuewith the allocation of coal blocks through the extant Screening Committeeprocedure till the new competitive bidding procedure became operational.
"This was a collective decision of the Centre and thestate governments concerned," Singh said.
