Tue, Jul 24, 2012 - Page 15 News List

India lost US$210bn due to coal nepotism: report

‘DIRTY’ BUSINESS:There have been 12 firms named in the probe that allegedly were ‘gifted’ coal mining bids in closed auctions that have cost New Delhi dearly


Indian coal miners carry baskets of coal inside an underground mine at Godavarikhani, about 250km east of Hyderabad, India, on Oct. 19, 2010.

Photo: AFP

Indian investigators believe 12 firms were given “undue favors” by the Indian government when it let them mine coal without making them bid for the rights, a newspaper report said yesterday.

A Central Bureau of Investigation official told the Mint newspaper that a probe ordered by India’s anti-graft watchdog found the dozen companies were given coal deposits without good reason.

“These companies did not meet requisite criteria to get coal and [it] appears that they were given undue favors,” the official said.

The official said preliminary investigations were expected to be completed by the end of next month.

The probe was launched after the Times of India revealed a draft report by the national auditor saying the government lost US$210 billion in revenues by awarding 155 coalfields to firms without inviting competitive bids.

The auditor’s final report on the allocation of coalfields, initially scheduled to be presented in parliament in May, was put on hold until the monsoon session, which will begin on Thursday.

Indian Coal Minister Sriprakash Jaiswal has said India will scrap its current allocation system and begin to hold open auctions later this year after finalizing the guidelines for the process.

The national auditor’s reports on treasury losses due to alleged graft have caused major scandals for the Indian National Congress-led government in recent years.

In one case, the auditor said the mis-selling of mobile phone licenses to favor some firms in 2008 cost India up to US$39 billion.

Phone licenses issued under the sale have since been revoked by the Indian Supreme Court, casting a cloud on the country’s previously heralded telecom sector.

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