PM admits he cleared coal block to Hindalco

In Strong Rebuttal Of CBI's FIR Against Birla & Ex-Coal Secy, Says Decision Was 'Appropriate' And 'Merit-Based'

New Delhi: The Prime Minister's Office on Saturday ended its silence on the latest and possibly most explosive development in Coalgate by acknowledging that Manmohan Singh put his stamp of approval (on October 1, 2005) on the allocation of a coal block to top industrialist Kumar Birla's Hindalco. At the same time, it vigorously rebutted the Central Bureau of Investigation's claim of illegality, saying the PM stood by the decision as no wrong had been committed. 
    Taking what is being seen in political and bureaucratic circles as an uncharacteristically strong stand, the PMO 
said, "The PM is satisfied that the final decision in this regard was entirely appropriate and based on merits of the case placed before him." 
    The PMO statement comes after retired coal secretary P C Parakh—booked along with Birla for alleged criminal conspiracy and misconduct, and corruption—said that if the CBI thought there were irregularities, then the PM ought to be "accused No 1" for giving his approval. 
    With the opposition baying for his resignation, Singh's move to forthrightly own up to having sought a reassessment of Hindalco's case after a representation by Odisha chief minister Naveen Patnaik appears intended to cap a politically debilitating controversy. But by doing so, Singh, who at the time held charge of the coal ministry, accepted he was the "competent authority" who signed off on the allocations in 2006-09, the period under CBI's lens. 
WHY HE UPTURNED ORIGINAL DECISION 
May 7, 2005 | PM receives letter from Kumar Mangalam Birla for allocation of Talabira II coal block to Hindalco. PMO seeks report from coal ministry June 17 |Birla repeats his request to PM Aug | Coal ministry sends file to PM, says screening committee decided to allocate Talabira II block to state-owned Neyveli Lignite Corp Aug 17 | PMO gets letter from Odisha CM Naveen Patnaik backing Hindalco request Aug 29 | Coal ministry asked to re-examine the allotments based on Patnaik's letter 
Sept 16 | Coal ministry resubmits file. Says Talabira II and III be mined as a single mine by a JV between Mahanadi Coalfields, Neyveli Lignite & Hindalco 
Oct 1 | PM approves the proposal 
Oct 15, 2013 | CBI registers a case against Birla and former coal secretary P C Parakh for criminal conspiracy and corruption in the Hindalco case. CBI says Hindalco was ineligible for coal block PMO stresses on Naveen's 'preference' for Hindalco 
    But by doing so, Singh, who at the time held charge of the coal ministry, accepted he was the "competent authority" who signed off on the coal allocations in the 2006-09 period – under CBI's lens. On whether the PM would be ready to be questioned in any Coalgate case, as suggested by senior minister Kamal Nath, a PMO spokesperson declined comment, saying CBI was yet to make such a request. 
    The PMO said it didn't wish to impede the CBI's investigation, but justified altering the screening committee's earlier decision to award the coal block in question to public sector companies Neyveli Lignite Corp (NLC) and Mahanadi Coalfields Ltd (MCL) by relying heavily on Patnaik's backing to Hindalco. 
    In accommodating Hindalco as the third partner in a joint venture, the PM also waived a violation in guidelines to enhance the firm's share by arguing that NLC and Mahanadi were "sister PSUs" and Neyveli's share could be made good from Mahanadi's 70% allocation. 
    It invoked the "federal framework" to say Patnaik's views had to be accommodated, and claimed that public sector claimants had not been disadvantaged. Countering criticism that private sector firm Hindalco had been favoured, the PMO said the coal requirements of the two PSUs, who also sought the blocks, were protected in a separate arrangement. 
    Neyveli Lignite was allotted Talabira II coal blocks in Sambhalpur by the screening committee headed by then coal secretary P C Parakh as the panel held that Hindalco had failed to utilize a previously allocated block. The PMO said while the original recommendation was being processed by it, the PM received a letter dated 17.8.2005 from the Odisha CM saying that the state government assigned "topmost priority" to allocating Talabira II to Hindalco. Singh noted "please get a report from the coal ministry" on the letter. Birla, in his letter, also sought the linkage and officials said he explained that Hindalco had not been able to use its previous allocation as a bauxite lease for its aluminium plant had not materialized. 
    Neyveli could not be dropped as it was a central PSU backed by the screening committee. In its account, PMO has leaned on the Odisha CM's "clear preference" for Hindalco in the "interest of creating more employment and growth of the state's manufacturing sector."