Edited Excerpts from an interview
How difficult is it to maintain your integrity when a minister expects you to circumvent procedures and execute his directions?
Corruption is fairly rampant at every level of the government. Ultimately, honesty is dependent on an individual’s conviction. It does not depend on how much money a person is making, though it may make a little difference. My wife and daughter were supportive and understood my financial limitations as a civil servant and never made demands that couldn’t be met with my salary. Problems with ministers and their oral orders existed for a long time. Civil servants have been advised that all orders should be put down in writing. The coal minister told me that not everything can be put down in writing. I told him this is the way I have always worked and I cannot comply with oral orders. The minister was not happy and wrote to the prime minister asking for my transfer. It is a civil servant’s choice and he can politely refuse to carry out oral orders.
When coal block allocations began, what was the format and how was it decided?
After I joined the ministry, I planned to use the competitive bidding process for the allocation. I thought I would put the screening committee process on hold but didn’t expect that it would meet with so much resistance. The files were submitted to PM Manmohan Singh while he held charge of the coal ministry after Shibu Soren’s first stint as minister, from which he resigned after a murder conviction. I briefed the pm on this, among other issues. In principle, he agreed that it would be a better way of doing things. I prepared a note for his approval and he gave it, directing a note for the Cabinet’s approval. By this time, Soren came back and the Cabinet note was put up to him by the PM through (the then PMO secretary) TKA Nair, and he said that as a Cabinet minister, he did not agree to competitive bidding. So, I had no choice but to close the file. Then Soren resigned again to become the Jharkhand CM. Then, I sent the note again to the PM. In that note, I suggested that the whole process of allotment is on hold and the government should consider an ordinance as a minor amendment to the Coal Mines Nationalisation Act to provide for auctioning. The PM approved the Cabinet note and said that this policy would be in prospective and not retrospective effect. So, all pending applications had to be disposed of using the existing system. So, we restarted the procedure through the screening committee.
What happened to the note you sent? What was MoS Dasari Narayana Rao’s role?
Another note was sent to the PMO, which said that there would be difficulties in allocating coal blocks through the bidding system. I am told that Dasari Narayana Rao gave this note to the PMO. It was sent to me along with the Cabinet note on bidding with a direction to re-examine the material with the new objections. I resubmitted the file to the PM. Rao added some more objections to the note and sat on the file till I retired. After I retired, he returned the file to the department saying that the PM has already approved the existing system of screening committee-recommended allocations and there was no urgency for the new system.
What was the view on the Cabinet note proposing competitive bidding process?
Many state governments were against open auctions. Everyone wanted a greater say in the allocation process. They probably felt that the auction process would not give them a say. In my view, we would need the same amount of inputs that we earlier got from the state governments and other ministries in the revised system. By introducing the open bidding system, we were not changing the role of the state governments or ministries. In auctioning, the coal ministry would still need the inputs of the state governments to gauge the bonafides of the parties in terms of their end-use projects. We got this view for the screening committee but this input would still be required as a pre-qualification for the bidders. Similarly, we would need technical inputs from the power ministry as to how much coal is actually needed for a power plant or setting up an industry.
Did the file have the notings of the PM himself?
No, it did not. The PMO has a system of keeping parallel files. An officer of the PMO conveys the PM’s orders to the ministry. There is no noting of the PM himself. Later on, the file was moved through other ministries and it was felt that not only coal but all minerals would be allocated through an open bidding process.
What was your impression of Shibu Soren?
Mr Soren is a good leader and has worked for tribals in his area. But, he was not the right man for the coal ministry and had no comprehension of the problems — issues such as opening of the coal sector and transparency in the ministry’s workings. These were not ideas I could put across to him in a convincing manner. His priorities were coal linkage, more employment in Coal India Limited (CIL), coal block allotments and so on. He didn’t comprehend that we had a coal supply shortage that hampered power generation. He could not deal with political problems such as dealing with state governments on land acquisition and forest and environment clearance. Our coal production has lagged because we have not been able to deal with these issues. He didn’t have the political clout to deal with the cms.
The PM is known as a reticent man and inactive policymaker. What was your impression?
He was a well-meaning man and tried to do things, but he had political compulsions in terms of running a coalition government. My interaction was limited to these issues I have mentioned, such as the problem of Soren and his continued resistance to open bidding. He called TKA Nair and asked him to talk to Soren. Normally, I would expect the pm to pick up the phone and talk to the minister directly about urgent matters. The PM did not have the strength to control his ministers.
What set off the problems with Soren?
After Soren took over, he wanted to transfer some of the directors of the coal companies. I was against it. The directors are appointed for a fixed term of five years. Earlier, the ministry had the powers to transfer directors from one company to another. That system was changed when the UPA came to power. The government decided that transfers would be approved by the ACC (Appointments Committee of the Cabinet). I told Soren that we would need to go to the ACC. Soren didn’t like the idea and hinted that I should build a case that there was a need for the transfers. He gave some directions to the CIL chairman about some transfers and coal linkages, which he had been resisting.
During Soren’s second stint, he called me for a one-on-one meeting. He was very courteous and said the public opinion was that I was running the ministry and not him. He said we could not function without synchronicity between us. He mentioned that because of me, the cil chairman was not listening to his directions. I said the coal minister could always give a written direction to the chairman and the minister should not interfere in the day-to-day working of the coal companies. Soren sent a letter to the pm asking for a replacement. Then, the Cabinet secretary asked for my response and I admitted there were differences that would make our functioning together difficult. These are annexed in my book. A week or so later, Soren had to resign to become the Jharkhand CM.
Why did you ask for voluntary retirement?
In August 2005, there was a parliamentary meeting to make CIL globally competitive. A few months earlier, we decided to give coal to the non-coal sector through e-auction. Dharmendra Pradhan of the BJP requested me to allot coal under the old system to some companies. I declined because a notification had already been issued. In coal-bearing states, the coal mafia controls these things. People register bogus companies and have coal allocated to them. The bogus companies would take the release order and sell it at double the cost to other companies. Politicians from the coal belt were unhappy with me and (CIL chairman) Shashi Kumar. In the parliamentary committee, Pradhan raised an issue about land acquisition for coal mining projects and the rehabilitation of displaced persons. He then accused me of lying to the committee before hurling abusive language. I did not leave the meeting because it would have been disrespectful. I came back to my office and requested for voluntary retirement and informed that I would proceed on leave pending the decision on the request.
What was the PM’s reaction?
Pradhan sent his views on what transpired and the PM asked for my comments. I went for a farewell call to the PM about how a MP had behaved with a senior bureaucrat. He told me this was how democracy had become and he too faces the same problem and advised me not to resign and let these things disturb me.
Did any minister or politician try to influence you regarding coal block allocations?
Some ministers, politicians, MPs, bureaucrats, relatives and friends would come to me and canvass for some company to get allocations. None of them were coercive in their manner. But, a former Congress MP from Dhanbad, Chandrashekhar Dubey, was belligerent in his recommendation for two companies, which I have described in my book in detail. He intimidated me and threatened to make my remaining tenure in the ministry difficult.
Though TEHELKA reported you as the whistleblower in the CAG audit and coalgate scam, the CBI lodged an FIR accusing you. What really happened in the Talabira coal block allocation, which led to the CBI FIR against you?
I couldn’t fathom why the CBI did this except that the CBI has not understood the way the Talabira coal block was allocated. They questioned why I had refused Hindalco first and then not sent it to the screening committee when they came again with a request. The committee did not have powers to make allocations; it was a forum for sharing views. Orders were issued after the minister’s approval. Talabira II and III are actually one large coal block of about 30 million tonnes, undivided by any faultlines such as rivers. In the committee, I took a view that PSUs Neyveli Lignite and Mahanadi Coalfields would jointly develop it as a single big mine instead of two separate mines. So, we rejected Hindalco’s application and Kumar Mangalam Birla protested to the PM saying it was being done because Hindalco was a private company.
The Odisha CM also wrote to the PM, recommending giving a share in the block to Hindalco, which was planning a smelter in the state. The PM forwarded me the two letters and Mr Birla also met me, making the same points. I told him we cannot lose the huge block of coal by splitting it and he could join by becoming a junior partner in the joint venture between the two coal PSUs. He agreed and I permitted because I already had the view of the screening committee, which had already favoured Hindalco.
Considering the timing right before the General Election, is there a political motive for publishing the book now?
My book is not critical of one political party; it is critical of the entire political system. All parties are involved — the Congress, the BJP, the TDP and the JMM. My book would have been out 8-9 months ago. When I was finishing it, the CAG report came and I wrote an extra chapter defending the CAG’s role in bringing it to public knowledge. Then the CBI FIR came and I had to add another chapter with the nine points refuting the FIR.