The Supreme Court's cancellation of all captive coal blocks since 1993 has a come as a shock to businessman and Congress politician Naveen Jindal, who is the single largest beneficiary of these allotments, nine in all.
The court in its order had said that the allocations were 'illegal" and "arbitrary".
In an exclusive interview to NDTV, Mr Jindal admitted that the court's order was a 'setback' for companies which have mined coal for the past 20 years to generate power and make steel, and now been told that what they are doing is illegal, while they have been creating wealth for the country.
But Mr Jindal's own company, JSPL, is amongst several being probed by the CBI in what is known as Coal-gate scam, of corruption in the allotment of coal blocks. Specifically, the CBI and the Enforcement Directorate has alleged that JSPL payed kickbacks of Rs. 2.25 crore to the then Minister of State for Coal Dasari Narayan Rao through a series of front companies in exchange for being allotted a coal block in Jharkhand.
Mr Jindal told NDTV, "I vehemently deny that there was any quid pro quo". Asked about the money trail, he admitted that "one of our companies had lent money" to a company owned by Dasari Narayan Rao, but the "money was returned to us in 2011."
Mr Jindal also said that he will be unable to pay a one-time penalty the court has imposed on all coal blocks that are under production to compensate for the windfall profits they have made. In his case, the estimate is around Rs. 2000-3000 crores. "We will not be able to pay it" he said, "because we have not made a provision for it".
But just one of Mr Jindal's power companies, JPL which receives coal by his captive coal block, posted profits of Rs. 2001 crore in just one financial year, 2010-11.
According to the power ministry's guidelines, captive coal allottees get cheaper coal and are meant to pass on the benefits to the consumer by entering into long term power purchase agreements, which keep power tariffs low.
Jindal, however, sells power at market rates, hence the high profits. When asked, Mr Jindal said "we are in a market economy, I will sell power at whatever is the market rate. I have to be most competitive whether I am supplying to someone through a PPA or a whether I am selling in the merchant market, they buy whoever is selling at the most competitive rate at that time."
Source: NDTV
