CVC help sought to improve process

With guidelines on future allocation of coal blocks in the process of being revised, the coal ministry on Tuesday wrote to the Central Vigilance Commission (CVC) for advice on making the allotment procedure more transparent and the state governments more accountable.

Government sources said coal secretary Sanjay Srivastava wrote to central vigilance commissioner Pradeep Kumar, a former coal secretary himself, seeking guidance on a proposed mandatory lock-in period of three to five years before which a government company or private player cannot dilute its equity and make a killing.

The CBI probe into coalgate has found that private companies made false claims based on cooked up figures to bag lucrative coal blocks and then diluted equity at a premium.

The screening committee that cleared the allocations overlooked several of these factors, as a result of which even media companies bagged coal blocks, according to the agency.

With consultant Crisil expected to submit its proposed guidelines for competitive bidding next week, the ministry also wants the CVC's advice on how to make state governments accountable as there have been instances of back-to-back deals in state capitals with private players.

States have in the past resisted the bidding process for coal blocks.

According to the minutes of a July 25, 2005 meeting in the Prime Mminister's office, "They (states) strongly felt the proposed changes amount to withdrawal of powers from the states and centralisation of decision-making. In response, it was suggested that measures may be incorporated in the competitive bidding procedure to give preference to companies planning to set up plants for approved end uses in the state in which the captive coal block is located."