'Companies grabbed free coal, now they want to profit'

Bharatiya Janata Party MP Hansraj Ahir, who has been at the forefront in exposing the scandalous free allotment of coal blocks by the United Progressive Alliance, explains the modus operandi of the coal scam in the second and final part of his interview with rediff.com's Sheela Bhatt.

Part I: 'Coal loot took place under PM's nose, he looked away'

When more than 100 allottees got coal blocks for free, why did they not mine the raw material and realise its value?

People simply grabbed the free coal since something so valuable was available for free. Muft ka maal tha! They got allotment of mines and then sat over it. In states after states they were looking for buyers and lucrative offers. They wanted rich buyers.

These allottees wanted to cut deals with big companies who make cement, steel and power. They sought appointments with top industrialists. Few small time businessmen who got the allotment told industrialists, we will change the management. They were ready to put the buyer's officers in the management of their companies. They wanted the best bargain for free coal.

Let me tell you these allottees are not talking about Rs 100 or Rs 200 crore. The values were in thousands of crores. I know two examples where these allottees have made incredible profits. I have proof of two coal blocks which they re-sold (paper transfer) and made huge profits running into hundreds of crores. The CBI is investigating it.

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One belongs to Jawaharlal Darda of the Lokmat group in Yavatmal right?

No. I don't think Darda has taken the coal block. I don't think he has done anything wrong. (Ahir's stand on Darda's case is at variance with his party's position. It seems there is an internal tussle over Darda in the BJP). I don't want to talk about any individuals. I want to talk about the national assets. We have before us 149 companies who got free coal blocks.

Kirit Somaiya (of the BJP) is making allegations against Darda...

I think he should not have named him. We are not fighting against any individual.

We should fight against billion of tons of coal that is given away free. It is not correct to make allegations against Darda. I have proof against Grace Industries, who owned coal blocks.

They gave a public notice in a newspaper that Grace (owned by Seema Mukesh Gupta and others) was sold to Sanvijay Rolling and Engineering Ltd (owned by Sanjay Agrawal). Grace had a coal block allotted to it at Lohara east in Maharashtra.

The sale was, reportedly, for Rs 109 crore. But there was a dispute over the sale. The advertisement mentions that the deal had taken place and it warned that no third party should enter into any agreement with Sanvijay because of the dispute.

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When the coal is not unearthed, why are you complaining?

Please think of the consumers of power. There are companies getting coal from abroad at a high transport cost. They are selling power at a higher rate and those who got the coal free are not going to sell at one fifth price. How is it possible? This government is blind. We have the proverb, andher nagri, chaupat raja (roughy translated: Dark is the nation and insane the king).

Our PM is a chaupat. It's a total mess all around us. This government does not understand a simple truth that the coal which is Rs 3,000 per tonne will be ten times costly after 30 years. We must not give it today for free. Why are they looting public property?

You had done an analysis of the 149 companies that got the coal blocks. How are they faring?

Out of some 149 companies who got coal freebies, some 50 companies are on way to power generation. Rest of them are roaming around in the market to sell the coal blocks and looking for buyers who can give them huge returns.

The Supreme Court gave a judgment on the 2G spectrum scam on February 2, 2012. The judges said that the natural resources can't be given away free of cost. It should be auctioned. I wrote to the government the very next day that take the judgment as the basis and cancel the free allocation of coal blocks. The UPA government and the Congress didn't act. They missed a political opportunity to kill the issue in February. Good for us! They gave us a politically potent issue on a platter.

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What was the modus operandi to make money through coal blocks?

A few cement companies got free coal and a few companies who made steel or steel products got the coal free. In spite of it being free, the coal blocks are not mined. It shows that the government is absolutely lying. Are the government's ministers representatives of the people or advocates of the power companies? It is wrong for the government to argue that allottees could not manage to get land so they could not start mining. If they had no capacity to acquire land why did they go for the coal block?

If they are unable to get land or other permissions, let them return the coal block to the government. Four companies have surrendered the blocks because they could not manage to tie up logistics. The real story is that those who got coal blocks don't have the investment back-up to start power generation because every megawatt requires huge investment.

Most coal block owners could not manage that kind of money. So they went out looking for buyers who can make them rich without going through the hardship of starting a power or steel company. The modus operandi of corruption was simple. I would say 90 percent of all applicants who were given free coal for sponge iron plants have made money. To set-up a sponge iron plant you hardly need Rs 50 crore but for all other plants, particularly power plants, operators needed huge investment. So the loot was done by the sponge iron operators who quickly made money on paper transfer of mining rights. They have made millions.

In this entire episode, the most important thing is that if this government cancels the coal blocks, our country would recover 100 percent coal that was given free due to a wrong policy. In this scam, it is possible to recover 100 percent material because the allotees have unearthed less than 1 percent of the coal.

Will the UPA government work for 1.2 billion people or just 150 people? Why are they worried about the handful of people's financial woes? I know many leaders are worried about the companies who got coal blocks. I guarantee you that nothing is going to happen to these companies. They know how to make money in adversity and government action won't affect them.

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Why is the government reluctant to cancel coal blocks?

The government is under the thumb of these companies.

After Congress President Sonia Gandhi's talk with BJP leader Sushma Swaraj, it is clear that Prime Minister Manmohan Singh is not ready to cancel the allotment of coal blocks.

Our PM is not the last PM of India. The subject and issue has percolated. It's clear to the people that this government belongs to these 150 companies, who will be defended at any cost. This message has already gone down to people. The BJP wants this message to reach the people! Let them keep repeating that industrialists will suffer, climate of investment would get affected etc...etc... It's nice to hear from this government. It's advantage BJP.

Do you agree with the figures of loss stated by the Comptroller and Auditor General?

We should not talk about figures. For us it is a serious mater if the CAG states that government made a loss of even a rupee! The CAG is a constitutional body. You can't insult it. People will not forgive the Congress for insulting the CAG. People are finding the Congress as an 'accused'.

Let me explain. How much is India's coal reserve? India must be having coal worth Rs 50 lakh crore. You have to do the mapping if the value of coal is this high at today's market rate then what will be its value after 30 years? Let me repeat my point. This coal is not going to be recycled. So the government should think twice before giving away natural resource which can't be recycled.

We must understand that coal will be used more efficiently in future as we are using petrol and diesel more efficiently now. The power generating capacity of a million tonnes of coal will surely increase as science progresses. We must not give coal free. Why is the government not thinking on these lines? Why should coal be unearthed and burnt today in a hurry? The loss is in the missed cost of opportunity.

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Was as it fair on part of Swaraj to allege that 'mota maal' was received by the Congress party? Where is the evidence of such transaction?

They are our leaders and they won't speak irresponsibly. The biggest evidence is that the UPA government gave away costly national assets for free. Second, when they had a chance to cancel the allocation, after the SC judgement on the 2G spectrum scam, they refused to do so.

Three, the UPA government is stubbornly refusing to encash bank guarantees of some allottees. There are any number of dubious companies who have been given coal blocks. Many companies don't have any plants. How can we prove that who has got what out of these deals? It is not possible that the government would take risk of allotting coal blocks for nothing. The government must have moved ahead only if the Congress would have benefited.

The coal secretary said that the government will not cancel the allocation of coal blocks.

He is not the owner of this country. His power is temporary. The secretary will come and go. This government should read history. Indira Gandhi was a daring leader who had guts to cancel the lease of miners and nationalise the sector. This government is spineless, they don't have Indira's guts.

Why would industrialists make cement, steel or power without high profit? After all they are taking risks.

Will they produce cement only if they are given free coal? Is this country run by the industrialists? Are we not running this country? Is the farmer not running this country? Then why favour rich industrialists only? Why are we not getting things for free? Why is farmer not getting things for free?

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The BJP's chief ministers too were recommending same 'tainted' companies that you think have got favours from the UPA. It's a clear case of doublespeak.

Any state chief minister would do that. They will crave for power, cement and steel. They need coal linkages. It's their business to get coal from the Centre. Their recommendation as such has no meaning because it is the Centre that allocated coal.

Not just the BJP, any CM of any party will write such letters. The CM is working as CM, it is the PM who should behave in national interest and fulfill his duty.

Why you didn't obstruct Parliament when such scam was in process? Why now when the allotment process is over?

I am screaming since 2005! There are ten speeches delivered in Parliament on the issue. I have written 15 letters to Dr Singh. In 2010, I have said on the record that the UPA has looted country more than the British. I have said so in the Lok Sabha. I went to an extent of saying in Lok Sabha that in this country even cow-dung is not sold for free and you are giving away free coal.

You are saying that the message of the UPA's corruption in coal allocation will percolate in the public. One would like to argue that the message is also percolating in the public that the companies that make cement, steel and power gives the funding not only to Congress but the BJP as well. They fund both sides.

You may know it. You take the message to the public. Let's see if the public believes you. Your allegation has no connection to the coal scam. If BJP guys have taken money would they oppose the coal allotment? The Congress party is saving the allottees by not canceling the allotment because they have taken (party fund) so they are under pressure. (Ahir said it in Hindi: Lekar dabe hue hai).

My party's leaders are not allowing Parliament to function; they are carrying on the movement. What all these things suggest? Still you think we have also benefited?

Have you faced the pressure from middlemen or fixers or the people who benefited?

No. My party is with me. I have taken care to not make allegations against any individuals. Nobody has come to me to silence me. In our country such things don't happen anymore where people like me can be silenced. I am happy that two years back, many owners of the companies who got the coal blocks told me that, "You are right! We should have taken the coal blocks through an auction route."

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What's the level of corruption in the coal business?

That you have to calculate. You should know what kind of business we are talking about. The moot question is: why is the Congress not ready to cancel the allotment? They (allottees) are not the relatives or friends of the Congress leaders. Why should they defend the owners of the coal blocks so vehemently?

Even the National Democratic Alliance government continued the flawed policy. How can you oppose it now?

The policy was formulated by the former prime minister P V Marsimha Rao. From 2003 onwards, research was on. We were debating on it and discussing ways to change the law. In 2004, the cabinet had taken up the draft of changes to be made in the policy of coal allocation.

I am not denying that the NDA continued Rao's coal policy. During the NDA regime we were changing a lot many policies on crucial national issues. The coal policy was just one of it. So much wrong had happened during the four-decades long Congress rule that the NDA had too many urgent issues to tackle.

For some 50 years, the Congress government didn't do many things. We took up lots of policy for debates. We could not complete the discussion on all of them. During the NDA time, coal was cheap so it was not priority.

What will happen next?

We are sure that there is no option but to cancel the coal blocks. We hope that the government will come back to its senses and will take a holistic view of the coal sector. If they accept their error in allotting coal blocks, the people will forgive them.

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