Coal deals scandal robs India of billions

Mark Magnier, London
March 24, 2012

DELHI: India’s parliament erupted in hoots and jeers after a draft report by government auditors estimated the national treasury lost 10,670 billion rupees ($197 billion) by selling coalfields to private excavation companies in sweetheart deals.

The report, leaked to the Times of India newspaper, said the primary beneficiaries were about 100 private and state companies that were handed contracts for 155 coalfields between 2004 and 2009 without going through a competitive bidding process. The report said that $197 billion was a conservative estimate given that it relied on prices for low-grade rather than medium-grade coal.

The scandal was the latest to hit the ruling Congress party, following others involving the telecommunications, real estate and sports industries.

Opposition leaders called the latest revelation the ”mother of all scams”, accusing the government of looting the country.

Auditors with the office of the Comptroller and Auditor-General countered that the leaked draft is misleading, adding in a letter to the Prime Minister’s office that the figures publicised were the product of discussions held at a ”very preliminary stage”.

”We are examining the news report and I have called for records,” the Coal Minister, Sriprakash Jaiswal, said. ”After that I will reply.”

The government said it has not received the report yet from the Auditor-General’s office.

India, the world’s third-largest coal producer after China and the US, has seen a series of mining scandals. In August, the top elected official in Karnataka state resigned after being implicated in a mining scandal that a watchdog said involved about $380 million. Three months later, a report claimed that almost 50 per cent of the iron ore exported from Goa state was illegally mined.

India is hungry for energy to fuel its fast-growing economy, and coal accounts for 70 per cent of the mix. That percentage is expected to grow, given limitations on the further development of power from nuclear reactors and renewable sources. Environmentalists, however, argue that increased production is ecologically unsustainable.

Kalpana Jain, an analyst with the consulting firm Deloitte India, said policy and regulations over mining deals are still evolving in India, which has long eschewed auctions in favour of a first-come, first-served policy.

Several senior government figures, including former telecommunications minister A. Raja, have been jailed on corruption charges.

Source



Categories: China, Economic Exploitation, Economics, Economy, Imperialism, India, International, U.S. News

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