Where is the scam in Coalgate?
23 Aug 2012
Just when we thought the 2G Spectrum scam was the ultimate, we are now told that we have another 'mega scam'.
We are further told the so called 'Coalgate' is bigger than any other scam this country has seen before, and involves almost all private sector company in the metals and power generation sector.
Rs1.86 lakh crore is not an easy number to comprehend. Imagine having nearly enough money to buy out all the shareholders of Tata Motors, Mahindra & Mahindra, Maruti Suzuki and Bajaj Auto. Or being richer than the Ambani brothers, combined. Now you have an idea.
The office of the Comptroller and Auditor General of India or CAG, an entity most had never heard of before the 2G Spectrum expose, now alleges that 57 private sector companies that were allotted coal mines for captive use beginning 2004 made undue gains of Rs1.86 lakh crore because the government didn't hand out the mines through a competitive bidding process. Instead, the government followed a policy of allotting coal mines to companies whose applications have been cleared by a screening committee in the coal ministry.
The CAG contends that if there was open bidding, companies would have paid the prevailing market prices for the coal deposits. Based on this, Coalgate looks similar to Telecomgate where A Raja and some of his predecessors allotted telecom spectrum for a fixed price and on a 'first-come-first-served' basis.
The draft CAG report on the same subject, leaked last year, had a figure that was more than five times larger, or above Rs10 lakh crore. In that report the CAG made the calculations based on coal prices that prevailed in 2011, when international prices of the commodity had soared. In the final report, the CAG has considered the average prices during the year of allocation for each mining lease.
