Deliberate Delay - a UPA Strategy
12. What is competitive bidding and how does it work?Competitive bidding is a transparent method of allocation in which coal blocks are offered
to eligible companies on the basis of auction. Auction allows the government to allocate scarce
resources in a profitable manner, especially when the demand for these resources exceeds
availability. Allocation through auction is also more objective and transparent, thus ensuring
that favouritism and cronyism doesn't play a part.
In the important judgment on the 2G spectrum allocation scam, the Supreme Court highlighted
that though the government is empowered to distribute natural resources such as coal, it is to
"ensure that no action is taken that is detrimental to public interest."9 The judges also went on
to say that in allocating scarce natural resources, the government is "duty bound to adopt the
method of auction by giving wide publicity so that all eligible persons can participate in the
process."10 In the 2G case, the Supreme Court also quashed the spectrum allocations which were
allotted on a discretionary basis and ordered that they be allocated through auction.
Though the UPA government fought hard against the BJP's very valid claims, by disrupting
the Parliamentary Accounts Committee and making a mockery of it, the injustice was corrected,
thanks to the court's decision in February 2012. (It was only after the court's judgment on
the 2G case that the government even got around to making rules for auction of coal, though
the necessary legislation was passed 2 years ago!) Once again, the UPA government is rejecting
the just course of action by refusing to de-allocate the coal blocks - just like they had to for
the telecom licences. One wonders if the UPA will ever learn from its repeated mistake.
It must be remembered that the BJP's strong protest and stalling of the entire Winter
Session of Parliament in 2010 to demand a JPC, the atmosphere for cancellation of fraudulent
spectrum allocations got cancelled. Now the Government has fixed a floor price of Rs 14,000
crore for the nine circles to be auctioned, against the Rs 1561 crore per circle at which these
were given out to favoured companies by the telecom Minister, A Raja. This means the
Government is assured of getting Rs 1.26 lakh crore from the auction. This demolishes the
Congress's argument that there was "zero loss" in spectrum allotments. BJP demands that,
similarly, coal block allocations to select private companies for free be cancelled and the blocks
auctioned. From this the Government will surely gather more than the Rs 1.86 lakh crore that
it has lost in this transaction.
