Coal auction success proves the scam was real, says Venkaiah Naidu

| Friday, February 20, 2015 - 17:22
First Published |

With metal and cement companies bidding aggressively for coal blocks, Union Parliamentary Affairs Minister M Venkaiah Naidu today said the success of auctions had proved that the coal scams were real and not an imagination of the CAG, vindicating BJP's position.

"The BJP's stand of insisting on a thorough inquiry has proved to be correct. The arguments by the then Finance Minister that there was zero loss has proved to be wrong," Naidu told PTI here.

He said former Prime Minister Manmohan Singh had said there was no scam but "now it is clear that the country had suffered a huge loss of Rs 1.86 lakh crore." Naidu said the Modi government's decision to conduct a "fair and transparent" bidding for 20 mines was benefitting the country. In just four days, he pointed out, the offers had crossed Rs 60,000 crore and the (mine rich) states would benefit maximum.

With 19 blocks currently on offer in the country's first mine auction, 14 have already been sold for nearly Rs 80,000 crore. In its findings in 2012 which dealt a severe blow to the Manmohan Singh-led UPA government, the Comptroller and Auditor General had noted that lack of a transparent bidding process had caused a staggering loss of Rs 1.86 lakh crore to the exchequer.

The coal blocks were earlier allotted through a screening committee mechanism which was changed to the process of auction bidding by the Modi government after the Supreme Court cancelled allocation of 204 mines in September last year. In the first tranche 19 mines are on offer and in the second round 43 blocks will be auctioned from February 25 to March 5. The government expects to raise Rs 15 lakh crore from the new bidding process. Most of the bids so far are beyond the expectations of analysts benchmarked against the prices of state-run Coal India.

India is expected to overtake the United States as the second-largest coal consumer after China this decade. The demand for coal in the country has outstripped supply with government monopoly Coal India Ltd not being able to ramp up the supply.

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