Coal block allocation to Hindalco entirely appropriate: PM

  • HT Correspondent, Hindustan Times, New Delhi
  • |
  • Updated: Oct 20, 2013 00:36 IST

Prime Minister Manmohan Singh’s office on Saturday broke its silence to strongly defend the controversial allocation of a coal block to one of industrialist Kumaramangalam Birla’s companies in 2005, and made it clear that it was the PM who cleared the proposal.

In a detailed statement on the eve of Singh’s departure on a five-day tour of Russia and China, the PMO contradicted the CBI’s contention that decision to award the coal block to Hindalco despite the screening committee having rejected it earlier was without any valid basis.

“The Prime Minister is satisfied that the final decision taken in this regard was entirely appropriate and is based on the merits of the case placed before him,” the PMO stated, confirming that the PM was the “competent authority” in the matter.

This is the PMO’s most forthright defence yet of the coal block allocation, the centre of a controversy that deepened after former coal secretary PC Parakh and industrialist Kumaramangalam Birla, chairman of the AV Birla group of which Hindalco is a part, were named in an FIR by the CBI last week.

The Opposition has been baying for the PM’s exit ever since the Comptroller and Auditor General (CAG) in a report last year suggested that the arbitrary allocation of coalfields may have robbed the exchequer of potential revenues of `1.86 lakh crore between 2004 and 2009.  The PM even delivered a televised defence after the CAG report was tabled, a measure of the seriousness of the issue.

Birla has received a chorus of support from India Inc, and even some UPA ministers have spoken out against the FIR, saying that it was anti-industry. Parakh has been vocal in the media, saying that if he were to be seen as a conspirator, the PM, who oversaw the ministry directly during the allocations, should also be in the dock.

The PMO statement also said that the allocation to Hindalco was not done at the cost of the public sector Neyveli Lignite Corporation.  It said that since this particular allocation is subject “to an ongoing investigation”, therefore no impediment is being placed on the CBI to continue its investigation.

Making it clear that the entire issue of coal blocks allocation is a matter of an ongoing CBI probe being monitored by the Supreme Court, the PMO said this particular allocation “is a case where the final decision differed from the earlier recommendation…..and this was done following a representation received in the PMO from the coal ministry.”

The statement has mentioned the letter written by the Odisha chief minister Naveen Patnaik to Singh on August 17, 2005, recommending allocation of a coal mine to Hindalco.      

The PMO has also released details of the sequence of events leading to Singh’s approval on October 1, 2005, and defending the decision, it has referred to Singh’s earlier statements that the government has nothing to hide and it will fully cooperate with the CBI.

The PMO said the CBI is free to investigate the case since it may have got hold of some documents post-allocation.


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