Supriya Sharma, TNN, Sep 9, 2010 :
RAIPUR: The case of alleged pilferage of coal worth hundreds of crore rupees by a company in Chhattisgarh raises uncomfortable questions for governments, both at the centre and the state.
In 2003, Prakash Industries was allotted Chotia coal block strictly for captive use in its sponge iron plant in Janjgir Champa district. The company said the plant's existing capacity was 4 lakh tonne, which it planned to double by 2004.
Procedurally, each time a company applies for a coal block, the ministry of coal seeks the view of the state government, which is expected to closely monitor industrial units, and check their worthiness.
But it appears Chhattisgarh government blindly endorsed the company's bid, without caring to independently verify facts, or even collect basic data.
This became evident in 2008, when in response to an RTI application filed by lawyer Vinod Chawada, the district industry office conceded it had no records on the plant or the company, not even its registration or licence number. This lack of information did not inhibit the state government from supporting the company once again when it sought and obtained Fatehpur coal block in 2007.
Next year, the company applied for one more coal block in Chhattisgarh. At the screening committee meeting of the coal ministry, the company's chairman and managing director V P Agarwal personally appeared and stated that the plant's existing capacity had risen to 8 lakh tonnes, and the company planned to expand it further.
This time, the state government contradicted the company. It said the plant's existing capacity had not gone beyond 4 lakh tonne. But the screening committee ignored the response and went ahead with a recommendation.
Within a week, a rival company wrote to the coal ministry alleging Prakash Industries had exaggerated its plant capacity, over extracted coal and under-produced sponge iron.
The coal ministry asked the steel ministry to investigate the allegations. A joint plant committee visited the company's plant in Janjgir Champa and reported that four brick kilns were operational with a capacity of 7.2 lakh tonnes.
This figure stood at odds with everything that the company had stated so far. It was lower than the 8 lakh tonne capacity the company had reported to the screening committee, higher than the 4 lakh tonne capacity it had submitted to the district mining office, and several times higher than the returns it had filed with the central excise department. That year, the company had paid excise duties for just 2.7 lakh tonnes of sponge iron. As this startling discrepancy came to its attention, in December 2008, the central excise department initiated a case against the company for fudging its actual production figures and under-paying excise unto 90 crore rupees.
Fudged figures, exposed lies and multiple investigations later, it is still not clear whether fresh coal block allotments to the company shall stay or go. Official sources say the case is currently being tossed between the ministries of coal and steel.
The case implicates the company, but equally raises questions for the government: why did the coal ministry go ahead with a recommendation despite contradictory figures? Why did the state government support the company's bids but fail to monitor the actual progress?
Chhattisgarh government may have succeeded in rapidly industrialising the state, but experts say it has failed to create a crucial system for supervision. "No checks are maintained, whether it is on mining or industry. This case is not an isolated one" says Laxmi Chauhan, an activist with the Korba-based organisation Sarthak, among the first to draw attention to the alleged violations by Prakash Industries.
When asked if the government plans to investigate the alleged violations, mining secretary S K Behar said it did not. During the last assembly session, Chief Minister Raman Singh, who also holds the mining portfolio, dismissed opposition queries on the case.
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