PMO officials and Prime Minister Manmohan Singh, if the PM is eventually questioned by the CBI, will have to clarify the “public good” involved in preferring a private company, Hindalco, to PSUs while allocating Odisha-based coal blocks.
The PM has publicly defended his decision to allocate the blocks to Hindalco and has already given a clean chit to the Aditya Birla Group entity. The latest CBI FIR relating to the irregularities in coal block allocation has, however, alleged that granting a 15 per cent equity share in the Talabira II coal block led to a “satisfaction level” of 81 per cent to Hindalco as against 29 per cent for the PSU Neyveli lignite Corporation (NlC). CBI officials explained that “satisfaction level” referred to the requirement of coal sought by the companies.
The FIR has also alleged that due to the arrangement made for Hindalco, the proposed power project of NlC that was approved by the Power Ministry could not take off. They said the 15 per cent equity share in Talabira II coal block to Hindalco was over and above the share allocated to the private company in Talabira I block that it already had. The percentage of requirement fulfilled by Hindalco was at the cost of corresponding loss to the PSU.
The CBI FIR states: “In his recommendation, the Secretary (Coal) (PC Parakh) proposed the formation of a Joint Venture Company between Mahanadi Coalfields ltd., M/s Neyveli lignite Corporation ltd. and M/s Hindalco Industries ltd. with equity share holding of 70%, 15% and 15%, respectively which was approved by the Competent Authority.” The “Competent Authority” has been identified as Prime Minister Manmohan Singh.
The allocation letter was issued to the three parties on November 10, 2005. Prior to the approval, the arrangement was discussed by Secretary (Coal) with M/s Hindalco and the file was further processed only after the latter’s agreement with the proposed arrangement, the FIR alleged.
“Thus, M/s Hindalco Industries ltd. (a Private company) was favoured by Shri PC Parakh, the then Secretary (Coal) and other unknown public servants in criminal conspiracy with each other at the cost of M/s NlC ltd, a PSU,” it further alleges.
CBI officials claimed Parakh did not specify public good in the files and the PM also ignored it while deciding the allocation of the block to Hindalco. CBI sources also claimed that Parakh failed to specify any “public good” on file notings when he reversed his earlier position of rejecting Hindaclo’s application for coal block in Odisha.
In Hyderabad, Parakh, however, said that he had given full justification in the files for the reversal of the Screening Committee’s decision in favour of Hindalco. The 25th Screening Committee had reserved the Talabira II block for PSUs and accordingly it was allocated to NlC. “All those things were recorded in my noting in the file and there is nothing further to comment on that. Why did we reverse the decision, all these things have been recorded in the file,” Parakh told a news agency in Hyderabad.
“Since I was heading the Screening Committee, I was fully aware of what was the discussion in the Screening Committee. And therefore it was not necessary to go back to Screening Committee,” he maintained. “It is not required. Because Screening Committee is not a statutory committee which takes decisions but basically make recommendations to the Government. The final decision is always taken by the Government,” he added.
In its reference to the CBI for probing the alleged irregularities in the coal block allocation, the Central Vigilance Commission had specifically asked the agency to investigate the role of the PMO officials.