Coalgate: ex-minister asked secy to ignore red flags

Former Union minister of state for coal Dasari Narayan Rao wrote to the then coal secretary, HC Gupta, in 2007 asking him to ignore the power ministry’s appraisal of companies while deciding on their applications for coal blocks, sources have told HT. Rakesh Ahuja reports.

Former Union minister of state for coal Dasari Narayan Rao wrote to the then coal secretary, HC Gupta, in 2007 asking him to ignore the power ministry’s appraisal of companies while deciding on their applications for coal blocks, sources have told HT.

“Both Rao and Gupta will be questioned about this note soon,” a CBI official said.

Gupta had chaired the September 13, 2007 screening committee meeting that decided to allocate Jharkhand’s Amarkonda Murgadangal coal block to Congress MP Naveen Jindal’s firms, Jindal Steel and Power Ltd and Gagan Sponge Iron Ltd, despite the Central Electricity Authority (CEA) — which comes under the power ministry — not recommending their applications.

According to CBI sources, Jindal's two firms didn't fulfil the criteria laid down by the CEA.

After retirement, Gupta was appointed member of the Competition Commission of India but resigned from the post after the government gave the CBI sanction to question him in the coal scam.

The CBI has filed an FIR against Jindal, Rao and five of their companies in the Coalgate scam. The agency has alleged that Jindal's firms invested R2.25 crore in Rao's companies after he got the coal block.

In his note to Gupta dated July 27, 2007, Rao, according to sources, said he had come to know from media reports that the power ministry was appraising companies on the basis of net worth, progress in land acquisition and water tie-up for their power plants. He reportedly recommended that the screening committee ignore this and evaluate applications as per past procedure.

Jindal Steel and Power had applied for a captive coal block for its 1,000MW power plant in Patratu, Jharkhand, and Gagan Sponge for another 1,000MW power plant in Dumka.

"Since the companies were establishing power plants, the power ministry's recommendation was necessary but Dasari Narayan Rao's note in effect said the screening committee should not use the appraisal done by the ministry," said the official.