Coal auction will increase power price,says Jaiswal

Jaiswal said the government had never entertained any specific firms or entities

The clamour for auction of coal blocks notwithstanding,the price of coal mined from blocks offered through competitive bidding was bound to be higher,leading to a commensurate increase in the price of electricity,Coal Minister Sriprakash Jaiswal said on Monday.

Today everyone is demanding that auctioning of coal blocks should have taken place. But once they are auctioned,the end produce generated through the auctioned coal,be it power or steel,is bound to be high. I am not very hopeful about auctioning,but there is no second way. The impact of coal offered through bidding will be visible within five years, Jaiswal told The Indian Express Editor-in-Chief Shekhar Gupta on NDTVs Walk The Talk programme.

Criticising the opposition for demanding Prime Minister Manmohan Singhs resignation in the wake of the CAG report that pegs notional benefits extended to private companies at Rs 1.86 lakh crore,the minister said Singh had a definite objective of steering the domestic economy to a new high,especially in the wake of the global economic crisis.

Jaiswal said the government had never entertained any specific firms or entities,including contributors to the Congress party fund,at the time of the allocation of these blocks. The Centre,he said,had consistently adhered to the rules of the game.

Stating that there cannot be any gains ascribed to companies that bagged these mines,Jaiswal argued that difficult blocks that were de-allocated from Coal India Ltds fold were the ones offered to private players. Such blocks,he said,were located in inhospitable terrain,including dense forests,and that it was an uphill task to convince the local people to facilitate coal mining.

But what was the alternative? If these blocks were not given to the private companies,then we would have been compelled to import the fuel at global prices,and would have had to price our power or steel accordingly. This is not wise.

The minister said it is imperative that the Coal Mines (Nationalisation) Amendment Bill,2000,which is stuck in the Rajya Sabha,be passed expeditiously with the cooperation of all political parties in order to ensure adequate coal production. He appealed to all parties to help in the passage of the Bill.

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Asked if the coal ministry agreed with the observations of the CAG,the minister said there were differences in principle with the way the audit watchdog calculated the purported losses. Coal ministry officials,he said,were upset that the CAG did not follow the usual practice of apprising them of its final figures.

Taking a swipe at the national auditor,Jaiswal said,The CAGs report should have reflected that it had no motive. Questioning the CAGs methodology,the minister said that to compare the coal to be mined from the allocated blocks to CILs prices was unfair,and the auditor needed to appreciate that each block has different seams and geo-mining conditions.

The minister said that if any company had indeed tried to mislead the government by producing false data or concealed information,the CBI would unearth them.

In reply to another question,Jaiswal said that the first coal mine could be auctioned within two to three months.