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Ex-minister kin got coal PSU deal

Looks like we have not heard the last of former minister of state for coal, Santosh Bagrodia, in the coal block allocation scam.

delhi Updated: Sep 12, 2012 01:12 IST
HT Correspondent

Looks like we have not heard the last of former minister of state for coal, Santosh Bagrodia, in the coal block allocation scam.

It seems in May 2008, a month after he assumed charge as the coal minister, Cuprum Bagrodia (CB), a firm owned by the former minister’s brother Vinod Bagrodia, had got a Rs. 600-crore mining contract from South Eastern Coalfields Ltd (SECL), a unit of state-owned Coal India Ltd (CIL), in Chhattisgarh.

CB’s competitor Delta Constructions Ltd (DCL) challenged the award of the contract first in the Chhattisgarh high court and then in the Supreme Court. Both petitions were rejected.

In Supreme Court, Delta had argued that CB was favoured as the firm was run by a relative of the minister.

This is the second instance of fingers being pointed at Bagrodia for allegedly influencing lucrative contracts in favour of firms run by his relatives.

“I have no business relations with my brother since 1986,” Bagrodia told HT. “Public sector undertakings are autonomous organisations. The tender for this contract was issued much before I became the minister. So the question of influencing the bid does not arise at all.”

On Tuesday, the Bharatiya Janata Party (BJP) demanded a probe after reports pointed out that a coal mine contract worth over Rs. 26,000 crore was given to a joint venture company in which Bagrodia's family was shareholder by "disregarding" the efforts of Singareni Collieries, a public sector undertaking.

In the case of SECL, the company had called for bids for extracting coal from its Sharda coal fields from qualified players using high-wall mining technology in which coal is cut and loaded without blasting reducing wastage and cost.

DCL has alleged that despite having the technical expertise it was not awarded the contract.

CB has maintained that it has secured the contract purely on commercial and technical merits. "We are an established player in the field of mining for the last 20 years. My brother was a minister only for about a year, but we have been running a successful business for many years before that," Vinod Bagrodia told HT.

DCL officials did not comment at the time of going to press.