India's 'Coalgate' deepens

Aug. 27, 2013 at 9:21 AM
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NEW DELHI, Aug. 27 (UPI) -- A brewing scandal over missing government files related to coal mining blocs allocation is unsettling India's government.

In an effort to defuse the situation, the Indian government is preparing to give an explanation about the furor, dubbed "Coalgate" by the media, to the Supreme Court.

India's Central Bureau of Investigation (CBI) is shortly to file a status report in the Supreme Court detailing its ongoing investigations and will allege that its efforts are being seriously hindered by a lack of cooperation from the Coal Ministry, which is not handing over the crucial files and documents to the agency.

During an Aug. 6 hearing the Supreme Court requested Attorney General G.E. Vahanvati to cooperate with the CBI and to hand over "any file sought by the CBI without delay," but the CBI is still waiting for 257 files and documents, India Today reported on Tuesday. Last month the Supreme Court requested that the government file an affidavit supported by documents, records and minutes of meetings held on coal allocations, including 36 steering committee meetings, which has yet to be submitted.

According to the U.S. Energy Information Agency, India has the world's fifth-largest coal reserves and coal remains the country's primary source of energy. The Indian government retains a near-monopoly on the country's coal sector, as the country's power sector makes up the majority of coal consumption. India has 211 gigawatts of installed electrical capacity, primarily in coal-powered plants, but because of insufficient fuel supplies, India suffers from a growing shortage of electricity generation, leading to rolling blackouts and India investigating any and all energy alternatives, including nuclear power.

Like China, India's domestic energy policy's primary objective is to secure energy sources to meet the needs of its growing economy, as its energy consumption more than doubled over the past two decades. The government, however, may not be able to deliver secure energy supplies to consistently meet demand because of fuel subsidies, increasing import dependency, and inconsistent reform of the country's bureaucratic ridden energy sector.

The missing files relate to the allocation of coal mining blocs to private parties at prices far below their market value, causing enormous fiscal losses to the government.

Analysts believe that an affidavit the Coal Ministry is preparing to the Supreme Court is likely to detail how often a special government panel met to decide on coal allocations to refute allegations that the coal blocs were arbitrarily assigned to benefit powerful private parties and companies linked to Congress leaders in violation of the government's standard procedures.

India's Parliamentary opposition has been demanding a statement from Prime Minister Manmohan Singh on how the files that the CBI wanted for its investigation went missing and allege that some of the missing files are from the period Singh was in charge of the Coal Ministry, and some companies linked to Congress leaders purportedly received coal blocs at massive discounts. Singh headed the Coal Ministry from 2005 to 2009.

On Aug. 23 Coal Minister Sriprakash Jaiswal stated that only seven coal files wanted by the CBI were missing, but the CBI asserts that it is still waiting for 225 files to continue its investigations.

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