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Excerpts of MoS Mr. Ashwani Kumar's opening remarks at the Press Conference in Mumbai on August 25

Mumbai: August 25,2012

Today, major national parties shying away from constructive debate in Parliament is an extremely unfortunate and dangerous development. I would like to reiterate, that every issue that confronts the nation can be discussed constructively on the floor of parliament. People of India expect their representatives to debate rather than stall the proceedings. It is an affront to the sensitivies and expectations of the people. Not agreeing to debate the issue and stalling the Parliament process is also a contempt of the highest institution of democracy.


Debate on CAG report
The CAG report on coal block allocations etc, under the procedure itself is inactionable. It is an established constitutional convention that the CAG report has to be validated by the Public Accounts Committee andthereafter it is presented before Parliament.


However, we have offered to discuss the CAG report in itself in Parliament, because the government has nothing whatsoever to hide. The campaign orchestrated against PM is a motivated attempt to weaken the moral and political authority of the centre. We will be compelled to take the debate to the people’s court through whatever means are available to us, in case we are prevented from doing so on the floor of the house.


The procedure for allotment of coal mines,
From 1993 to 2004, the policy of allotment through the Screening Committee was in vogue. In 2004, the Government issued instructions through advertisement detailing the terms and conditions and eligibility criteria for allotment of coal mines. The reason for making this information public was to aid any of the aggrieved parties to seek redressal, if the allotments were not made as per guidelines.


Coal blocks auctioning
The question being asked now is why no auctioning?
In 2004, the UPA government mooted a proposal to change the method of allotment through competitive bidding. But, we had to consult the state governments as well. The governments of West Bengal, Chhattisgarh and Rajasthan did not favour the auctioning method. The then Rajasthan CM Ms. Vasundhara Raje Scindia, wrote to PM not to change the allotment criteria, reasoning that the state government will not have any role if the mines get allotted to outside parties and they bring not benefits to the state.


The Government then sought the legal opinion. The fist opinion asked the government to amend the legislative framework. When the state government’s opposed the proposal, the second opinion from the Law Ministry said the law can be amended by an Executive Order. The divergence of opinion compelled the government to consult the Law Ministry again, and it was advised that to change the procedure of allotment the Act has to be amended.
In 2008 the draft bill was formulated, which went to the Standing Committee. In 2010, the Standing Committee asked to go back and talk to the state governments. All this process took time. The delay was neither deliberate not intentional. It was intended to put the law on a sound footing, arrived at through widespread consultations. .

Presumptive calculation of loss
CAG’s calculation of loss are presumptive. Anyone who knows anything about geology will understand that there is no such thing as a average price and average reserves. The mines vary in their coal reserves and even the cost of extraction varies from mine to mine. Therefore, multiplying the average reserves with average cost plus selling price and arriving it a figure is totally flawed.


Further, out of 57 allotments only one allottee has been able to mine the coal. There is been no mining in 56 coal blocks for a variety of reasons, including not getting environmental clearance etc. The coal is where it is. The government has already denotified 25 mines. 32 allottees have been cautioned against non action. If the coals are not mined, they will come back to government. Where is the loss?


There is also no exercise of arbitrary power. Because all the allotments have been made on the recommendations of the Screening Committee, in which all the concerned state governments were represented through their Chief Secretaries.
 

Benefits to infrastructure development

Coal was required to increase power production, steel production, and to boost cement production. It was necessary to allocate coal mines to supplement the supply of coal from Coal India ltd. India’s 8 per cent growth did not come out of nothing. In the 10th plan period, total addition to capacity of power was 8575 Mw. In the 11th Plan it was 42,000 Mw, a five fold increase. This was possible because government tried to maximise natural resources.
That is the way to look at opportunity cost.

 
PIB Release/MH/191
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