Odisha Chief Minister Naveen Patnaik's request for allocation of Talabira-II coal block to HINDALCO was approved by him on the advice of then Coal Secretary PC Parakh and examined by PMO officials, former Prime Minister Manmohan Singh has told the CBI.
He said Patnaik's letter requesting a review of refusal to allocate the coal block to Kumar Mangalam Birla's HINDALCO had led to the "re-opening" of the issue.
During the probe into the alleged scam in Talabira-II coal-block allocation, Singh was asked by CBI, "When the letter dated August 17, 2005 of Naveen Patnaik addressed to you as PM had only requested to provide required coal linkage for the important project of M/s HINDALCO, which was already allocated, why did you approve the accommodation of HINDALCO in the share of coal in Talabira-II coal block."
Responding to the query, Singh said, "This letter of CM of Odisha also mentioned about the allocation of Talabira-II coal block to M/s HINDALCO Industries Ltd. This was required to be looked into by the Ministry of Coal.
"It was interpreted by the MoC that the request in the letter was regarding issue of allocation of Talabira-II coal block. This recommendation was approved by me after it was examined by the PMO officials," said Singh, who was also the Coal Minister at that time.
"With regard to the query that giving coal block could be more beneficial financially to the company than giving a coal linkage as the price of coal from coal block is much cheaper than price of coal from coal linkage; I state that it is true of all allocations to the private sector," Singh said.
Singh further said that if this logic was applied, the government should not make any allocation for the private sector.
"In this context, the recommendation of the Chief Minister of Odisha vide his letter dated August 17, 2005 favouring HINDALCO for allocation of Talabira-II is relevant," he said.
While Birla had written letters requesting the government to "change the decision" of not considering HINDALCO for the coal block, Patnaik had requested a review of the decision.
The special court had summoned Singh, Parakh, Birla and others as accused in the case while refusing to accept CBI's closure report.
They have all denied any wrongdoing in the case.
The Supreme Court had on April 1 stayed the trial court's order summoning them as accused.
Singh said while the Coal Ministry "interpreted" Patnaik's request to be for allocation of the block, Parakh had proposed to "accommodate" HINDALCO.
"This was approved by me after it was examined by the PMO officials," the former Prime Minister said.
Singh said the issue was to see whether HINDALCO could be accommodated without harming the interest of Neyveli Lignite Corporation Ltd (NLC), a PSU, which was initially recommended by screening committee for the block.
"On being asked as to why I approved the proposal of Secretary, MoC, to accommodate HINDALCO in the share of coal in Talabira-II coal block, though the SC (screening committee) had in its minutes mentioned that coal linkage of 3.06 MTPA had already been allocated to HINDALCO which was sufficient to meet the full requirement of 650MW power plant and that no separate coal block needs to be given for the Aditya Aluminium Project; I state that I went by the advice of Secretary (Coal) and as endorsed by the officials of the PMO," Singh said.
"It was due to the letter of the CM of Odisha (Patnaik) that the whole matter was re-opened. The issue was to see whether Birla could be accommodated without harming the interest of NLC," he said.
As per the 25th screening committee, the case of a number of companies, including HINDALCO, was not considered favourable and it had decided to allocate Talabira-II coal block to NLC.