In which the Banking Correspondent Auctions finally go below the psychological zero percent margin mark…
for a while now, i have been reporting on the never-ending happiness that is the finance ministry’s “one cluster, one BC” model — essentially, to split india into 20 clusters and then to have one common banking correspondent company for all public sector banks operating in each cluster. this company would then be the only conduit through which welfare programme monies (and cash transfers) would flow from banks to the poor pensioners, nrega workers, what have you.
for a while now, there has been some concern that entrusting such a vital role to one company would sooner or later result in it developing monopolistic tendencies. this concern has been deepening as one saw companies put in incredibly low bids to win clusters — for an industry which has been saying that a 2% margin is not enough, bids have ranged between 0.86% to 0.02 and 0.01%.
but now, there is something new under the sun. a company called seashore has emerged as the L1 bidder for Orissa after bidding minus 0.06%. these guys propose to pay the govt 6 paise for every rs 100 the company delivers unto poor households.
in this interview to ET, naveen jindal, the head of Jindal Power and Jindal Steel and Power, makes a startling claim.
the five habits of successful coal block allottees (that manage to pip more eligible companies to coal blocks)
today’s ET carried a story which tries to answer one of the many puzzling questions thrown up by the coal scam — how did small, obscure companies like Jas Infrastructure or Vini Steel & Power bag a coal block where larger, more established ones failed?
a part of the answer lies in, yes, the screening committee which was allocating blocks. however, the companies too did their bit to come across as worthy suitors for a coal block. today’s ET carries a story that details the four things these cos did to get blocks, and how they monetised thereafter.
briefly, they outlined aggressive expansion plans, they signed MoUs with state governments, they invested some money on the project to make it look like they were serious about it, and, they talked up their financial numbers.
take a look?
On Tuesday, ET carried a small update on how the institutional response to coal-gate was shaping up. That article ended by concluding it will take more than these responses to clean up the suppurating mess in the indian coal sector.
A story by my brilliant friend/colleague Avinash Celestine and me in today’s ET Magazine elaborates on that theme. We argue that while a lot of government (and media) attention is focusing on the lack of auctions, politicians slipping coal blocks to friends, family and — possibly — pets, and companies dragging their feet on the blocks given to them, a mass of other questions are not getting the scrutiny they deserve. These include the one-sided contracts PSUs are signing with private cos for extracting coal (See this and this), the poorly understood and explained crisis in coal india, the role of the bureaucrats in perpetuating the status quo, the statistical jugglery while quantifying india’s coal reserves, political rent-seeking…
Take a look? Click here.
A company brand new to the steel business and owned by the sons of Rashtriya Janata Dal leader Prem Chand Gupta applied for a coal block when he was the Union minister for corporate affairs and bagged it about a month after his tenure ended along with that of his government. This is the third public revelation in recent days of private entities linked to politicians being awarded coal blocks in contentious allotments that took place between 2005 and 2009.
A story by my colleague Biswaroop and me, out in ET today. Take a look? Click, here.
The story of alleged irregularities in the allocation of coal blocks to private players for captive use is taking a distinct turn, with institutions at three levels responding within their jurisdiction, and a chance of a fourth one stepping in.
a quick and dirty update on what the CBI, the Parliament and the government itself are trying to fix the coal mess. This accompanied the EMTA story (see previous post).
heard of a company called emta?
no? i hadn’t either when i started work on the coal stories. and yet, over the last 15 years, it has silently raced up to become one of the largest cos in india’s coal economy. its coal reserves, say industry wallahs, rival those of western coalfields, which is one of the principal subsidaries of coal india.
out today, my story on emta and the complicated factors that explain its rise and rise. take a look?