Whistleblower in the dock?

Politicians have enough reason to hate him. As the Coal Secretary between 2004 and 2005, P. C. Parakh was insistent that the policy of allotting captive coal blocks was ad hoc, lacked transparency, and opened the possibility of “windfall” gains for the private sector.

Parakh could not prevent the scam that the Comptroller and Auditor General (CAG) says cheated the Exchequer of Rs 1.85-lakh crore. But he played the role of a whistleblower.

His numerous communications — pointing to the “pulls and pressures” the screening committee faced when giving out coal blocks and the imperative to switch to an auction system — left important clues for the CAG in documenting how the flawed policy was implemented. On October 15, the Andhra Pradesh cadre IAS officer — known among his peers for uprightness and decisiveness — was accused of doing what he had been cautioning the Government against.

The Central Bureau of Investigation charged (CBI) Parakh with indulging in corruption in granting Hindalco a participatory interest in a coal block in Odisha “in the second half of 2005”, months before his exit from the Coal Ministry. Two State-owned miners own a majority stake in the block. Parakh, the investigation agency said, reversed an earlier decision to allot the block only to government sector companies.

It is for the court to decide if Parakh, who retired in 2005, was “influenced” by Hindalco Chairman Kumar Mangalam Birla, as is suggested by the CBI. But possibly, the scam was limited because of him.

From June 2004, when the new Congress-led UPA Government in Delhi started discussing ways to speed up coal-asset distribution to meet the nation’s energy needs, Parakh kept proposing auctions as the safest route. A comprehensive note was prepared within weeks.

For nearly a year thereafter, Parakh engaged the entire administration, including the Prime Minister’s Office (PMO), in a raging debate on the allotment policy. The result: allotment of blocks was delayed until March 2005.

The chronology of events, as detailed by the CAG, points out that though well briefed by Parakh, the PMO chose to oppose the bidding route, citing legal logjam (this was ruled out by the CAG) or opposition both from the power sector and the coal-bearing States.

With politicians keen to go ahead with the ad hoc captive dispensation, the screening committee, headed by Parakh, started allocating assets to private parties from March 2005.

Companies with little or no record started cornering coal assets. For instance, a Nagpur-based sponge-iron maker managed to get four assets.

By end-2005, Parakh was out of the Coal Ministry. The real action began in 2006. According to the CAG, between 1993 (when the captive dispensation began) and 2005, 41 coal blocks bearing 3.3 billion tonnes of reserves were allocated to the private sector. But between 2006 and 2008, the screening committee allocated 52 blocks with nearly 8.74 billion tonnes of coal reserves through captive dispensation (this excludes assets allotted to Ultra Mega Power Projects).

Some solace

There is also another distinction in the asset allocation pattern between 2005 and 2006-08. According to the grapevine, having failed to convince his political masters, Parakh decided to allot assets to almost everyone in the queue so as to keep away from “pulls and pressures”. Companies with varied backgrounds were clubbed together and coal blocks allocated to ‘consortiums’.

But till date, there has been little progress in developing these assets. As consortium partners, most of the outfits that queued up eyeing a quick buck appear to have either lost interest or failed to reach a consensus.

The scam could not be prevented. But the party was definitely spoilt.

>pratim.bose@thehindu.co.in

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