A fair probe needed

It cannot be said that the ghost of coal block allocations has been buried. Along with the method of spectrum allocation, it had become the Achilles’ heel of the previous Manmohan Singh government and was the driver of the charge of corruption brought against it by opponents, principally BJP.

The Supreme Court cancelled the allotment of 204 coal blocks in 2014 as these had been done administratively, as per decades-old practice. The present government therefore introduced the system of e-auctions in an effort to bring fairness and competition to the exercise.

However, the report of the Comptroller and Auditor General (CAG) on the first two rounds of e-auctions done in March 2015, which was tabled in the Lok Sabha last Tuesday, raises important issues about the way the auction was conducted.

The two principal points are that the tendering process for the e-auction was flawed and that the government undervalued the amount payable to it by successful bidders for different coal blocks. These caused the exchequer a loss of considerable magnitude.

The process was flawed as it did not permit an adequate level of competition among bidders. Multiple entities arising from a single business group were permitted to participate as separate bidders. This caused cartelisation and price rigging and loss to the exchequer. Worries over possible cartelisation were expressed in these columns when the issue was under debate during the UPA-2 dispensation.

A credible probe must ascertain if faulty auction procedures resulted from corruption, or were a by-product of mismanagement.