The coal secretary from 2006 to 2009, HC Gupta, begins his deposition before the Central Bureau of Investigation (CBI) on Thursday. TKA Nair, the prime minster’s erstwhile principal secretary and now his advisor, is expected to be probed as well. It now emerges that the PM, who held direct charge of coal at the time, was under pressure to keep the gravy trail ablaze, and then law minister HR Bhardwaj torpedoed a cabinet note by the then coal secretary, PC Parakh, that the ‘screening committee’ (under Parakh!) on discretionary allocation of coal mines must be disbanded and auctions replace it.

But as the CBI gets set to dig deeper in the coal block allocation scam, it’s worth rewinding the clock to 2004.

In March 2004, Parakh, asked a curious – and as it turned out, clairvoyant – question to Kamal Pande, the then cabinet secretary. “Why have I been picked up for the job of coal secretary?” he asked.

Pande, the seasoned Kumaoni Brahmin, remained enigmatic, but Parakh recalled, “He did confirm that there were several contenders for what’s considered a lucrative job!”

It’s seldom remembered that Mamata Banerjee was the coal minister at that time. So she, in technical sense, for the act of accepting Parakh in her ministry, planted a whistleblower among the coal mafia!

“Yes, I was surprised how I was picked up (for the job of coal secretary),” Parakh told me during a conversation, “but it is also true that by then she (Mamata) had got busy with preparations for the general elections.”

So nothing really exciting came off in the new coal secretary’s life between March and May 2004. Likewise, the ‘screening committee’, created to legitimise the government’s opening of gates of coal in 1993.

As coal secretary, Parakh remained wary of chairing the committee and handing out lucrative coal mines to private-sector applicants, the chosen dispensation of rewarding political donors. It was the lack of process and norm that scandalised Parakh – particularly the system of keeping everyone happy by subdividing a mine.

A geologist by training, Parakh had figured out that not only were the norms governing the ‘screening committee’ ridden with arbitrariness, they were pregnant with potential to blow up into a jolly good scandal. The only reason this hadn’t happened in the intervening period since 1993 was that “there had been no significant demand”.

But by 2004, more bees had smelt the honey. Instead of one or two applicants for every mine, their numbers were rising, sometimes to four or five, the slimiest ones armed with insider information (which Parakh found cost the government Rs 4 crore to create and was shared with the allottee post facto).? Of course, on paper, no one was supposed to know which mine was on offer, what to speak of pre-publicity, press, or its geological specifications!

The inherent discrimination driving the ‘screening committee’ must give in to a proper bidding mechanism, the dyed-in-the-wool bureaucrat thought.

With his geologist’s training, Parakh realised that he must end the ‘screening committee’s usual stunt of subdividing a lucrative coal block “artificially” only to keep multiple claimants happy. “Subdividing was wasting up to 25 percent of the coal inside,” he said.

But astute enough to factor in political reality, Parakh preferred that groupings and joint ventures should come forward upfront.

Also, Parakh was familiar that costs of mining the mineral varied significantly, as did quality of the extraction, and price at which it can be ultimately sold. “Therefore I thought this insider information must all be placed upfront for all potential investors.”

Wiping out the screening committee

In a word, the coal secretary was determined to be the prophet of annihilating the ‘screening committee’ under his own charge, anxiously waiting for the new government to take over!

But in came the UPA government with, irony of ironies, Shibu Soren, a man with deep vestment in coal, as the minister and Dasari Narayan Rao as his minister of state.

Yet, much to the discomfort of his two political bosses, Parakh managed to enunciate the first pronouncement of competitive bidding (auctions) on June 28, 2004.

The date – June 28, 2004 – is important because it became a reference point for the ancien regime when prime minister Manmohan Singh feebly tried to set the house in order later that year.

It helped Parakh that at the time Soren was ensnared in a battle for political survival. In fact, exactly a month later, on July 27, Soren had to resign, and the PM took over the charge of coal for the next four months, before he had to be reinstated on November 27 for the next four months.

It was while Soren was off his back that Parakh moved his first cabinet note, recommending a two-line insertion in the Coal Mining Act. The insertion pertained to the introduction of competitive bidding. With the coal mafia baying for more leases and then cabinet secretary BK Chaturvedi under pressure for shortages of coal, Parakh wrote a draft ordinance and forwarded it to the law ministry.

But Bhardwaj, the law minister, and Dasari Narayana Rao, the MoS, saw through the game plan. Even as Manmohan Singh (as coal minister) concurred, the ordinance was nixed.

The official explanation? That the Coal Act was being comprehensively revamped anyway, so what’s the need of an ordinance! “I wonder why the CAG (Vinod Rai) missed this,” remarks Parakh.

And what of the ‘screening committee’? ‘Boys, get back to work, start handing out mines (to our political donors…!)’

The only toehold that Parakh was able to extract was that his public assertion of June 28 became the “cut off” for applications already in ‘screening committee’s’ pipeline.

With the committee forced back into action, “we tried to do a fair job,” Parakh asserts. But Soren would have none of that. No sooner had he reemerged in the coal ministry he did what he should have in the first innings itself: demand in writing that Parakh be thrown out.

To Manmohan Singh’s credit, the file kept doing the rounds but Soren’s wish was never granted. In fact, Parakh out-survived his mantri and Soren’s encore in the ministry gave way to his short-lived anointment as Jharkhand’s chief minister on March 2, 2005. Parakh tried to get an RTI copy of Soren’s recommendation, something BK Chaturvedi successfully denied him until Wajahat Habibullah, the chief information commissioner, passed an order in Parakh’s favour.

Parakh ran into more turmoil, though, and a set of MPs apparently abused him in such a manner that he sought premature retirement. The PM, a former civil servant himself, was coal minister as well as the minister for personnel at the time. He managed to pacify his bureaucrat and Parakh eventually retired at his official date in December 2005. Dasari Narain Rao breathed a sigh of relief!

A few key questions for CBI, then:

•   Why was the ordinance dropped?
•   Who did that help?
•   Who stood up?
•   Did Dasari Narayana Rao, TKA Nair, BK Chaturvedi, Vinod Rai, and Bhardwaj merely serve and wait?
•   Why did they puncture Manmohan Singh’s endorsement of auctions?

And while an RTI activist asks for the file, maybe, a chat with Parakh might interest CBI chief Ranjit Sinha. The subject could be 'caged parrots'!

Tailpiece: Parakh politely clarifies that he doesn’t spell his name in the more popular way, ‘Parekh.’ A Google search will tell you that ‘Parakh’ means skill to anticipate the tide.

NB: "A comprehensive note on competitive bidding for allocation of coal blocks placed by the then coal secretary (PC Parakh) to MoS, Coal mentioning that since there is substantial difference between price of coal supplied by Coal India and coal produced from the captive blocks, there is windfall gain to the person who is allocated a captive mine...Secretary, Coal said the present system of allocation in the changed scenario, even with modifications, would not be able to achieve the objectives of transparency and objectivity in the allocation process….As per the note of coal secretary, steps could have been taken to allocate blocks through auctioning through competitive bidding in September 2004."
- Report of the Comptroller & Auditor-General of India.