Vande Mataram

Friday, September 21, 2012

Coal gate - Nothing to forget about

Aping the west especially USA is  the way of most of the walks of life nowadays. Even in naming a corruption charge. The Union Government's latest in the list of it's corruptions is the loss of Rs.1,86,000 crore to the exchequer, in allocating the coal mines in our nation. The CAG has come up with a clear and methodical approach is exposing the loss, which is termed as presumptive, to the exchequer. But given to understand that this loss to the exchequer has been a gain for someone, makes one sit up and ask a list of questions, which the Government feels uneasy to answer.


Private Audit and Policy research firms suggest an empirical approach to decide on the loss to the exchequer. Kameswara Rao of PwC warns against applying a single methodology to all blocks to estimate their financial worth - and, in this case, loss to the government. "The economic value of these blocks is certainly not zero," says Rao, energy, utilities and mining leader. "But estimating that value is not very easy either.

We have an opinion that the the loss calculated by the CAG is pretty much a conservative figure. Every coal mine pays a royalty to the Government for every tonne of coal extracted. When auctioned in Madhya Pradesh, the royalty amount sky rocketed to 700 -2100 INR per tonne, against the 120- 180 INR going by the revenue estimates of Coal India on the 57 mines allocated. This is selling something for a song with the buyers bagging a hefty profit and duly fill the coffers of vested interests.

If coal is not mined, if coal remains buried in mother earth, where is the loss. The loss can arise only if one tonne of coal is taken out of mother earth and sold at some unacceptable price or value, said the Finance Minister PC, but only to deny days later that the words above do not mean 'Zero Loss'. What is the difference in the meaning of No loss and Zero loss? Debatable in a courtroom? Seems the lawyer turned politician is so concerned about being quoted properly in the media rather than running the national affairs properly.

One of the Union Ministers Ashwani Kumar, when confronted with papers proving that coal blocks were allocated arbitrarily, has said that the coal block allocations were done in a systematic manner and when the screening committee found that some of the coal blocks have more resources than the bids for them, the Government chose to allot those blocks to companies which have applied for other blocks.

Strictly going by that argument, is that not arbitrary? If someone applies for A block the Government allocates D block to them since D block has more resources than bids were for that, questions to be answered are:
  • Why D block did not receive bids for its full resources? 
  • What were considerations taken in to allocate a different block?
  • Is the allotted company fit enough financially and technically to operate from that different mine block?
  • Why did the company opted for A block and on what merits they agreed to work on the D block?
  • Was any incentives given to woo them to the D block? 
  • Business and legal justifications for the incentives, if given.
  • Was the process mandated by the prevailing law complied with, in such forced allocations?

The government had also tried to foolishly uphold the arbitrary allocation of coal blocks saying private sector's initiative in the industry was needed because Coal India was unable to increase output adequately. But the fact is almost all of the coal blocks allocated were without any production till date.

The seemingly convincing argument is that higher the price of the coal, higher would be price of power. Nope. It is not about election spending. This argument is put up to justify the lower pricing of coal to get electricity at a lower price to the public. But the financial results of private power companies paste a different picture altogether. Lower price of coal and higher price of electricity have given them windfall profits. Like the oil companies shedding tears on  losses and hiking fuel prices while making mammoth profits annually.

The CAG has pointed out the near paralysis in the policy making which resulted in a mammoth blow to the exchequer that is already fighting for breath. The auction was not a proposal from the CAG after the audit. It was proposed by the Secretaries to the Government which was left to oblivion as usual since they were not profitable for those who still have interests vested in.

Government of India has blocked the social media accounts of journalists playing key roles in bringing its corruption out and of the right wingers who strive for righteousness which is rightful for every citizen of this nation. The dreaded violence against the North East fellas in Southern India is also seen as a campaign to divert attention and a cover to restrict passage of information. The blame put on Pakistan and the methodical non-perusal of it adds fuel to the burning suspicion in that matter.

The current Mamata - Mulayam gates are also seen as a ploy to shift attention from the corruption in coal allocation and no-so-much-spoken-about Thorium loot. The economist seated in the political chair of the nation is turning a blind eye to the corrupt practices of his associates which is directed by his Boss who is a prime beneficiary of all corruptions.

Nothing is well and this will end up in ending the Congress party's political life and thus the once much respected Mr.Clean ending up as a covert supporter of corruption in history. But well, irrespective of good or bad mentions, Dr.Manmohan Singh's name will be in history.  After all, the demons, tyrants, pirates and murderers find place in history along with the divine, kind, brave and benevolent. For the first time we'll have an idler finding place in history. That too is an achievement. Something for the first time!

3 comments:

  1. Environmentalists add that the effects of polluted water will be felt in the next 50 years in most of the local towns and the productive farms due to mining on river catchments and fertile soil.

    Don Blankenship

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