Manmohan Singh says coal block for Hindalco Industries was 'entirely appropriate'

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Congress Vice President Rahul Gandhi with Aditya Birla group chairman Kumar Mangalam Birla at the foundation stone laying ceremony for a mega food park in Jagdishpur, UP on Monday. PTI Congress Vice President Rahul Gandhi with Aditya Birla group chairman Kumar Mangalam Birla at the foundation stone laying ceremony for a mega food park in Jagdishpur, UP on Monday. PTI
SummaryKumar Mangalam Birla gets PM Manmohan Singh backing in coal block allocation corruption FIR.

law, he said.

Singh’s communication adviser, Pankaj Pachauri, said the detailed statement showed “we have nothing to hide”.

Singh has also acknowledged that he permitted a deviation from his own guidelines on the percentage of share the Aditya Birla group firm could get in the joint venture with public sector coal companies.

Instead of Hindalco Industries getting a 7.5 per cent share it was doubled to 15 per cent by cutting down the share of Neyveli Lignite Corporation (NLC) as it was felt NLC could get the rest from the other joint venture partner, Mahanadi Coalfields. “This would fully meet the coal requirement of the two to set up their power project and protect their interests,” the statement said.

Singh said he received two requests from Kumar Mangalam Birla in May and June 2005 for reconsideration of the screening committee’s orders rejecting Hindalco Industries' application.

Kumar Mangalam Birla “requested (for) allocation of Talabira-II coal block in Odisha to Hindalco for its 650 MW captive power plant in its integrated aluminium project in Sambalpur district, Odisha and for a 100 MW captive plant for the expansion of its Hirakud aluminium plant in Odisha”.

The letters were sent by Singh to the coal ministry along with the recommendation made by the Orissa chief minister to give the coal blocks to Hindalco Industries to “take them on record, re-examine the matter in light thereof and resubmit the file”.

The coal ministry submitted a revised proposal in September which included Hindalco Industries as a 15 per cent JV partner.

The proposal cleared by Singh in October 2005 highlighted that the “chief Minister, Odisha had reiterated this position assigning topmost priority to the allocation of Talabira-II in favour of Hindalco”.

His position is key since under the MMDR Act a mining lease for coal can only be granted by a state with the previous approval of the Central government, “thus both need to concur before an allocatee can be granted a mining lease”.

The key reason of the screening committee to deny the block to Hindalco Industries, its existing long-term coal linkage with MCL for supply

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