Taking on the Opposition on the coal blocks allocation issue, Union Law Minister Salman Khurshid on Monday said the BJP governments in Rajasthan and Madhya Pradesh were strongly against the adoption of the auction route for coal blocks.

The resistance was so intense that these States and the Naveen Patnaik-led BJD government in Odisha wrote to Prime Minister Manmohan Singh, stressing that auction was not in the interests of the States or the Centre.

At a press conference here, Mr. Khurshid released letters written by the then Chief Ministers, Vasundhara Raje (Rajasthan) and Shivraj Singh Chauhan (Madhya Pradesh), claiming that part of the delay in amending the necessary Acts to enable auction was because of the resistance from these States.

He said the CAG report did not claim that the government had lost anything in the allocation of coal blocks, but suggested that it should have tapped resources by going in for auction. “But the report did not specify how much of it. Is it half, one-third or two-thirds?” All the allocations were as per the procedure adopted by the screening committee and the Prime Minister had nothing to do with the procedure adopted for allocating coal blocks.

Of the 57 blocks referred to in the report, 20 were allocated for power generation and these could not be auctioned as power generation firms participated in competitive bidding in the States on fixation of tariff. “There cannot be auction on both ends [State and Central governments].”

The Minister said the companies that secured blocks paid 14 per cent royalty and 33 per cent corporate tax which again dovetailed to the exchequer. “If we reduce these and whatever remained untapped, there will be no amount left for any unfair benefits.”

There was an insinuation that the auction was intentionally delayed, but there was no truth in the charge, as the process of passing legislation would take time. “The question is whether we should stop allocating coal for steel, cement and power sectors till it is finalised?”

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