Coal scandal threatens Indian PM
19:59 • 18.08.12
India's auditor suggested Friday the government lost billions of dollars by failing to auction valuable coal mining rights in a damning report that implicated Prime Minister Manmohan Singh.
The hotly awaited findings, which led the opposition to step up demands for Singh to resign, criticised how coal blocks were given to companies in a murky allocation process instead of being sold by open bidding.
The Comptroller and Auditor General (CAG) estimated that since mid-2004 private operators who won coal blocks without competition may have enjoyed "financial gains to the tune of 1.86 trillion rupees ($33.4 billion)".
"A part of this financial gain could have accrued to the national exchequer," it added, without giving an estimate for the total loss to the state or alleging that there had been corrupt or criminal practices.
It said the problems of granting coal rights for free instead of inviting bidders had been raised as far back as June 2004 when coal officials had discussed the potential for private groups to make windfall profits.
Since then, a new policy had been repeatedly delayed and 142 coal blocks had been allocated to various large firms, including Essar Power, Tata Steel and Jindal Steel and Power.
"This allocation lacked transparency and objectivity," the CAG concluded.
Singh, who has been prime minister since 2004, also served as coal minister from 2004-2009, and the CAG documented a number of official meetings, memos and directives about the need for new legislation.
Singh's coalition government, dominated by the left-leaning Congress party, has been beset by a string of corruption cases since re-election in 2009 and the latest allegations of mismanagement led to renewed pressure on him.
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