Former coal minister Santosh Bagrodia's brother got hefty mining contract
New Delhi, Sept 11 : A company in which former coal minister Santosh Bagrodia's brother had shares, got a coal mine contract worth over Rs 23,000 crore between 2006 and 2010, the Times of India
India TV News Desk
September 11, 2012 8:54 IST
New Delhi, Sept 11 : A company in which former coal minister Santosh Bagrodia's brother had shares, got a coal mine contract worth over Rs 23,000 crore between 2006 and 2010, the Times of India reported.
The PSU power giant National Thermal Power Corporation awarded the coal mine contract to a joint venture company in which 10% shares are held by the family of former coal minister Santosh Bagrodia.
Significant parts of the tender for awarding Pakri-Barwadih (PB) coal block took place when Bagrodia was minister of state for coal in the UPA government.
The company which lost out in the race for the contract was another PSU, Singareni Collieries, that reported directly to Bagrodia, says the TOI report.
Bagrodia, a former Rajya Sabha MP from Rajasthan, was the minister of state for coal, with Prime Minister Manmohan Singh as the cabinet minister, between April 2008 and May 2009.
The commercial bid submission, regarded as a crucial step in awarding the contract, happened when Bagrodia was in office.
NTPC board awarded the PB coal block mining project to Thiess Minecs India, in which the Bagrodia family holds a 10% stake, in the first week of December 2010.
When contacted, Bagrodia denied any role in Thiess Minecs getting the contract, while claiming that he has been estranged from his family in business matters since 1986 when he became an MP.
Bagrodia said:
"Vinod is my brother, but I have no idea whatsoever about what kind of business he is doing. We don't consult each other, advise each other or interfere in each other's business."
Thiess Minecs told TOI in a statement: "Thiess Minecs India Private Ltd denies any role of Mr Santosh Bagrodia in winning the Pakri Barwadih Project, which has been awarded to TM by NTPC Ltd following a 56-month long, competitive tender process."
The estimated contract price is "Rs 230,030 million equivalent to $5111.78 million (considering 1$= Rs 45)" and the contract was for 27 years, NTPC told TOI in a written statement.
NTPC said Thiess Minecs is a joint venture company where "90% of the shares are held by Thiess (Mauritius) Pty Ltd which is a 100% subsidiary of Thiess Pty Australia and 10% of the shares are held by Minecs Centre Pvt Ltd, a 100 % subsidiary of Cuprum Bagrodia Ltd."
Cuprum Bagrodia is owned by the Bagrodia family. The former minister's brother Vinod and Vinod's son Songit are directors of the company.
NTPC said the "ownership details of Minecs Centre Pvt Ltd are neither available in the bid nor sought for by NTPC as Thiess Minecs India Pvt Ltd have been qualified on the technical experience and financial strength of its promoter Thiess Pty, Australia (Majority share holder)."
When asked if it was aware of the minister's family's involvement, NTPC said, "A general description of Minecs Centre Pvt Ltd has been given in the bid."
On Singareni Collieries losing out the contract, NTPC said, "Both the bids were technically and commercially responsive. Thiess Mines India Pvt Ltd's bid price was lowest and has been awarded the contract."
The contract to Thiess Minecs is mired in allegations that the award price of coal is almost Rs 200 per tonne higher than what was estimated by NTPC's advisors, MECON Ltd, a government owned engineering consultancy firm, and others.
The price is allegedly higher than the award price of Coal India in the region.
"It can be said that the price is broadly in line with the estimates, considering implication of strict quality parameters and risks involved in execution of the nature of contract which is for 27 years," NTPC said.
Dr R Srikanth, Thiess India's chief executive said that Cuprum Bagrodia had been a dealer for Komatsu Mining, a Japanese construction and mining equipment maker that was working with Thiess in other parts of the world. It was because of Komatsu's reference that Thiess got into JV with Cuprum Bagrodia, he said.
"It is no sweat equity, they have to pay for it," Srikanth, a former Tata executive, said, arguing that the presence of Bagrodia had no impact on the contract. "We were L1 by a huge margin," he said.
"TM was formed in December 2005 (more than 27 months before Mr Santosh Bagrodia was appointed as minister of state for coal in April 2008) to bid for and execute specific coal mining projects in India as a mine developer & operator," Thiess Minecs said in a statement.
And on March 31, 2006, NTPC invited bids for the 15mt per annum Pakri-Bawardih (PB) coal mining project in Jharkhand.
While the technical bids were submitted in April 2007, much before Bagrodia became coal minister, the crucial commercial bids were submitted in July 2008, when he was the coal minister overseeing Singareni Collieries.
"Is an individual responsible for the activities of everyone in their families, including an adult son, if any?" Bagrodia asked.
"I didn't even know that Singareni Collieries or my brother was bidding. Nobody asked me, including Singareni at any point of time. Please ask Singareni if I have told them anything. Even Coal India files for their operations don't come to the ministry, what to talk of Singareni," he said.
When asked if he had informed the Prime Minister about his family's involvement in the bid or why he didn't recuse himself from coal portfolio, Bagrodia said, "Either Singareni or my brother or somebody else should inform me. Am I supposed to imagine up things?"
He added, "If there is any irregularities let them enquire and punish whoever is responsible."
This is not the first time that Santosh Bagrodia's role as minister has come under scrutiny.
In 2009, South Eastern Coalfield Ltd, another PSU under the coal ministry, awarded a coal mining contract to Cuprum Bagrodia.
In its notice to shareholders on the 27th annual general meeting, the company had said they have been awarded the tender for mining at Rs 626 crore and the preliminary work on the project is underway.
The PSU power giant National Thermal Power Corporation awarded the coal mine contract to a joint venture company in which 10% shares are held by the family of former coal minister Santosh Bagrodia.
Significant parts of the tender for awarding Pakri-Barwadih (PB) coal block took place when Bagrodia was minister of state for coal in the UPA government.
The company which lost out in the race for the contract was another PSU, Singareni Collieries, that reported directly to Bagrodia, says the TOI report.
Bagrodia, a former Rajya Sabha MP from Rajasthan, was the minister of state for coal, with Prime Minister Manmohan Singh as the cabinet minister, between April 2008 and May 2009.
The commercial bid submission, regarded as a crucial step in awarding the contract, happened when Bagrodia was in office.
NTPC board awarded the PB coal block mining project to Thiess Minecs India, in which the Bagrodia family holds a 10% stake, in the first week of December 2010.
When contacted, Bagrodia denied any role in Thiess Minecs getting the contract, while claiming that he has been estranged from his family in business matters since 1986 when he became an MP.
Bagrodia said:
"Vinod is my brother, but I have no idea whatsoever about what kind of business he is doing. We don't consult each other, advise each other or interfere in each other's business."
Thiess Minecs told TOI in a statement: "Thiess Minecs India Private Ltd denies any role of Mr Santosh Bagrodia in winning the Pakri Barwadih Project, which has been awarded to TM by NTPC Ltd following a 56-month long, competitive tender process."
The estimated contract price is "Rs 230,030 million equivalent to $5111.78 million (considering 1$= Rs 45)" and the contract was for 27 years, NTPC told TOI in a written statement.
NTPC said Thiess Minecs is a joint venture company where "90% of the shares are held by Thiess (Mauritius) Pty Ltd which is a 100% subsidiary of Thiess Pty Australia and 10% of the shares are held by Minecs Centre Pvt Ltd, a 100 % subsidiary of Cuprum Bagrodia Ltd."
Cuprum Bagrodia is owned by the Bagrodia family. The former minister's brother Vinod and Vinod's son Songit are directors of the company.
NTPC said the "ownership details of Minecs Centre Pvt Ltd are neither available in the bid nor sought for by NTPC as Thiess Minecs India Pvt Ltd have been qualified on the technical experience and financial strength of its promoter Thiess Pty, Australia (Majority share holder)."
When asked if it was aware of the minister's family's involvement, NTPC said, "A general description of Minecs Centre Pvt Ltd has been given in the bid."
On Singareni Collieries losing out the contract, NTPC said, "Both the bids were technically and commercially responsive. Thiess Mines India Pvt Ltd's bid price was lowest and has been awarded the contract."
The contract to Thiess Minecs is mired in allegations that the award price of coal is almost Rs 200 per tonne higher than what was estimated by NTPC's advisors, MECON Ltd, a government owned engineering consultancy firm, and others.
The price is allegedly higher than the award price of Coal India in the region.
"It can be said that the price is broadly in line with the estimates, considering implication of strict quality parameters and risks involved in execution of the nature of contract which is for 27 years," NTPC said.
Dr R Srikanth, Thiess India's chief executive said that Cuprum Bagrodia had been a dealer for Komatsu Mining, a Japanese construction and mining equipment maker that was working with Thiess in other parts of the world. It was because of Komatsu's reference that Thiess got into JV with Cuprum Bagrodia, he said.
"It is no sweat equity, they have to pay for it," Srikanth, a former Tata executive, said, arguing that the presence of Bagrodia had no impact on the contract. "We were L1 by a huge margin," he said.
"TM was formed in December 2005 (more than 27 months before Mr Santosh Bagrodia was appointed as minister of state for coal in April 2008) to bid for and execute specific coal mining projects in India as a mine developer & operator," Thiess Minecs said in a statement.
And on March 31, 2006, NTPC invited bids for the 15mt per annum Pakri-Bawardih (PB) coal mining project in Jharkhand.
While the technical bids were submitted in April 2007, much before Bagrodia became coal minister, the crucial commercial bids were submitted in July 2008, when he was the coal minister overseeing Singareni Collieries.
"Is an individual responsible for the activities of everyone in their families, including an adult son, if any?" Bagrodia asked.
"I didn't even know that Singareni Collieries or my brother was bidding. Nobody asked me, including Singareni at any point of time. Please ask Singareni if I have told them anything. Even Coal India files for their operations don't come to the ministry, what to talk of Singareni," he said.
When asked if he had informed the Prime Minister about his family's involvement in the bid or why he didn't recuse himself from coal portfolio, Bagrodia said, "Either Singareni or my brother or somebody else should inform me. Am I supposed to imagine up things?"
He added, "If there is any irregularities let them enquire and punish whoever is responsible."
This is not the first time that Santosh Bagrodia's role as minister has come under scrutiny.
In 2009, South Eastern Coalfield Ltd, another PSU under the coal ministry, awarded a coal mining contract to Cuprum Bagrodia.
In its notice to shareholders on the 27th annual general meeting, the company had said they have been awarded the tender for mining at Rs 626 crore and the preliminary work on the project is underway.