‘Competitive bidding would favour private players, give rise to monopolies’

Even as the controversy over the Comptroller and Auditor-General’s (CAG) report on coal blocks allocation that reportedly caused a loss of Rs. 1.86 lakh crore to the national exchequer rages, the Communist Party of India (Marxist) has said coal allocations and mining, in future, should be done through the public sector.

In an article in party organ People’s Democracy, party general secretary Prakash Karat has demanded a high-level investigation to fix the responsibility for the irregularities and corruption in the coal block policy.

“Those found guilty have to be prosecuted. All allocations which have been made irregularly have to be cancelled. In all the instances where windfall profits have been made, steps must be taken to recover the losses suffered by the government,” he said.

Mr. Karat pointed out that the coal blocks scandal should be an opportunity not only to identify the perpetrators of the “loot the resources” policy, but also to demand a reversal of the privatisation of natural and mineral resources. The competitive bidding or auction route could create serious difficulties.

“Competitive bidding would favour the large private players; it would lead to private monopolies and cartels forming. Public utilities and State-government-run corporations will not be able to compete. Further, as the experience shows in the coal block allocation so far, it will not be possible to ensure the end-use provision. Another aspect of the competitive bidding for coal will be pushing up the cost of power generation and the resultant pressure on the regulated tariffs in the power sector,” he wrote.

Seeking to clarify the stand of the Left Front in West Bengal, he said: “The Left Front government’s reservations on going for an outright competitive bidding route have been distorted in sections of the right wing corporate media. It has also been twisted by Arvind Kejriwal and company belonging to the India Against Corruption group.”

Mr. Karat noted that the coal-bearing States had to be given a say in the allocation of blocks if their industrial development and energy needs were to be met.On the outcry resulting from the CAG report, he said it had focused on need for a system of competitive bidding to allocate coal blocks.

“Competitive bidding would be better than the present system if it is the question of eliminating corrupt practices and favouritism in the allocation of coal to private parties.

“The main issue, however, is whether the coal industry is to be privatised or not. As far as the CPI(M) is concerned, it is resolutely opposed to the privatisation of the coal sector. That is why it has been opposing the use of the captive coal block route to introduce private companies into the coal sector.”

The Prime Minister’s statement in Parliament on coal blocks allocation was a brazen attempt to defend an indefensible policy.

“Under the Prime Minister’s watch and the two Ministers of State in the Coal Ministry, concerted efforts were made to push ahead with this venal system of allocating coal blocks.

The United Progressive Alliance government and the Congress leadership cannot escape responsibility for this latest case of high-level corruption.”

Describing as “breathtaking” the Bharatiya Janata Party’s “hypocrisy” in disrupting Parliament to demand the Prime Minister’s resignation, he said the BJP had pioneered the captive coal block route and brought the coal privatisation bill in Parliament.

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