CAG had hailed ex-coal official P C Parakh as whistleblower

Parakh,an IAS officer of the Andhra Pradesh cadre,had in 2004 asked the then minister of state for coal Dasari Narayana Rao to discard the system of distributing blocks through the committee,and start competitive bidding for captive mines to increase transparency in the allocation process.

In its report,the CAG said: “A comprehensive note on competitive bidding for allocation of coal blocks placed by the then coal secretary to MoS,Coal mentioning that since there is substantial difference between price of coal supplied by Coal India and coal produced from the captive blocks,there is windfall gain to the person who is allocated a captive mine…“Secretary,Coal said the present system of allocation in the changed scenario,even with modifications,would not be able to achieve the objectives of transparency and objectivity in the allocation process.”

The CAG report estimated the loss to the exchequer in the coal block allocations at Rs 1.86 lakh crore.

Parakh had told Rao that the screening committee experienced various pulls and pressures during the decision-making process. A draft cabinet note prepared by Parakh for Rao stressed on the desirability of taking decisions on all pending applications on the basis of competitive bidding.

At a meeting with PMO officials,the former coal secretary suggested that there should be a cut-off date for entertaining applications for the auction process,which the PMO accepted. “As per the note of coal secretary,steps could have been taken to allocate blocks through auctioning through competitive bidding in September 2004,” the CAG observed.