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How CVC-CoalMin sabotaged ECL CMD appointment

By Soma Chakraborty, New Delhi
16/06/2016   1 Comments

Bureaucracy Today in this report brings to light the alleged mishandling of the highest-level appointment in the Eastern Coalfields Limited.  According to sources, a conspiracy was hatched by some “vested interests” in the Central Vigilance Commission (CVC) and the Coal Ministry to sabotage the appointment of ECL CMD. It is also a story of some “highly influential people” in the Government crippling the appointments to key positions in the PSU at the cost of making a dent in its performance.  A BT investigative report.

The Eastern Coalfields Limited was a perennially loss-making public sector undertaking. However, in 2009-10 the ECL started catching up a growth trajectory and showing profit due to radical changes in the functioning of its management and some epoch-making decisions. During 2009-10 the PSU turned around to earn a profit of Rs 333 crore compared to its previous loss of Rs (-)2100 crore in 2008-09. In 2014-15, the profit was Rs 1,139 crore and ultimately the ECL came out of the fold of the Board for Industrial and Financial Reconstruction (BIFR). 
 
But alas the turnaround could not be maintained due to what sources term “sinister designs” of vested interests in the Coal Ministry and in the PSU. Two key positions of the Chairman and Managing Director and the Director (Technical) have been lying vacant in the PSU for over one year till the time this report goes to press. Sources in the PSU reveal that the company is currently facing revenue losses due to the absence of decision-makers in the company. The ECL is a classic case of how the mishandling and apathy of the Central Vigilance Commission, the Appointments Committee of the Cabinet (ACC) and the Coal Ministry have pushed a promising company into its doom. 
 
THE BEGINNING OF THE DOOM
In October 2014, the Public Enterprises Selection Board (PESB) chose the then ECL Director (Technical), Subrata Chakravarty, as Chairman and Managing Director of the Eastern Coalfields Limited. Chakravarty was to take charge of his assignment on June 1, 2015 after the end of the tenure of Rakesh Sinha on May 31, 2015.
 
However, that was not to be. Confidential documents in the possession of Bureaucracy Today indicate that there was an apparent effort to scuttle the process of taking charge by Chakravarty as CMD. Highly placed Coal Ministry sources also reveal that “some interests” were trying hard to get the tenure of Rakesh Sinha extended by keeping the vigilance clearance of Chakravarty at bay and making it a pretext for not clearing his appointment as CMD.
 
Interestingly, flouting all guidelines the Central Vigilance Commission sat over the file of clearing Chakravarty’s appointment as ECL CMD. Even after getting reminders from the Coal Ministry to expedite the process of vigilance clearance of Chakravarty, no action was taken by the CVC till February 24, 2015.
 
A Coal Ministry note dated  May 21, 2015, a copy of which is with Bureaucracy Today, states that the CVC in reference to Chakravarty’s case “asked the CBI to register a PE (preliminary enquiry) in the matter of irregularities in procurement of 240 and 190 MT Dumpers and 20 Cubic Mtr Shovels and submit a report after thorough investigation. CBI report is awaited. The Commission, therefore, advised this (Coal) Ministry to place the facts of the case and status thereof before the competent authority while it considers his suitability for the appointment”.
The note further states that “as no timelines have been indicated by the CVC or CBI, this appointment is likely to be delayed indefinitely”.
 
It is pertinent to mention here that DoPT guidelines do not provide any indefinite delay on the part of the CVC to give vigilance clearance. As per the laid down guidelines, it is mandatory for the CVC to complete the vigilance clearance process “within two months from the date of receipt of the vigilance profile of the selected candidate from the Ministry and send it to the Ministry. This period of two months will include consultation with CBI/CBI clearance, reference to the CVO of the Ministry for any report or clarifications”.
 
The guidelines further state, “In case vigilance clearance is not denied by CVC within the two months period stipulated, the ministries shall proceed with the appointment process, without waiting any further.”
 
However, in spite of having a distinct guideline as to what action is to be taken if CVC clearance is not forthcoming within the stipulated period, the Coal Ministry moved a request to the ACC for its approval to scrap the panel recommended by the PESB and go in for fresh selection. Surprisingly, the ACC also gave its nod and in August 2015 the panel was scrapped for reasons known only to senior officers at the Coal Ministry and the Cabinet Secretariat. 
 
The ACC action raises eyebrows as recently it approved the extension of tenure of the CMD of a prominent oil and gas PSU whose vigilance clearance is yet to come. “Why did the ACC choose to be selective in the ECL case? It puts a question mark on its credibility,” a source opines.
 
Meanwhile, during all this fiasco, Rakesh Sinha moved a request to the Ministry for extension of his tenure as CMD of the ECL beyond the age of his superannuation. However, the request was not considered. According to an official document, the Ministry turned down the request for two reasons. First, the request was not received before the due date of his superannuation and second, the PESB had already recommended the name of Chakravarty for the post of CMD by that time. However, sources say the truth is very different from what the Ministry is saying. “Though everything was made in place to give Rakesh Sinha an extension, a buzz started floating that Chakravarty would take legal recourse. Frightened that the move would pull off the mask from the vested interests in the ministry, the officials concerned took a U-turn,” a source privy to the entire affair tells Bureaucracy Today.
 
Ironically, a month after the scrapping of the panel and after a prolong wait for reasons best known to the CVC, the Commission vide a letter dated September 16, 2015 gave vigilance clearance to Chakravarty both for the extension of his tenure as ECL Director (Technical) and his appointment as ECL CMD.
 
In view of the changed scenario, there was a deliberation in the Ministry whether a proposal should be sent to the ACC for seeking its approval for revival of the panel appointment of Chakravarty as ECL CMD. But no decision was taken till the filing of this report. 
 
CONTRADICTION IN COAL MINISTRY’S DECISION
Paradoxically, the same Ministry which was against Chakravarty’s appointment as ECL CMD, had recommended his appointment to continue as ECL Director (Technical) which is governed by a similar process of vigilance clearance as for the CMD, but the ACC turned down the proposal. 
 
Chakravarty’s five-year tenure of Director (Technical) ended on March 22, 2014 and the ACC had given him an ad-hoc extension till June 30, 2015. The Ministry had requested the ACC that Chakravarty be given further extension beyond June 30, 2015, but it did not happen.
 
Coal Secretary Anil Swarup also raised the issue with the PMO. In a letter dated September 11, 2015 which was sent to a senior PMO officer, Swarup writes, “ECL is operating in difficult geo-mining conditions and was a sick company till 2014-15 when it came out of BIFR with sustained efforts. At present, there is no regular CMD…Therefore, immediate relieving of Chakravarty from the post of Director (Technical), ECL, will seriously affect the performance of the company. It will take 6-7 months to get another Director (Technical) appointed through PESB. Further, the other Director (Technical) of the company, BR Reddy, has also been selected for the post of CMD, SECL. In the absence of both the Technical Directors the performance of the company will be adversely affected particularly in view of the fact that it has just come out of BIFR and continuity is required to sustain the efforts of the management.”
 
Swarup further writes, “I shall, therefore, be grateful if you could kindly have the matter reconsidered and approval of ACC obtained at the earliest for extension of the existing appointment of S Chakravarty as Director (Technical) on ad-hoc basis for a period of six months or till regular CMD, ECL is appointed, whichever is earlier.”
It is pertinent to mention here that the other ECL Director (Technical), BR Reddy, took over as CMD of the South Eastern Coalfields Limited on March 1, 2016.
 
On May 27, 2016, the PESB recommended the name of Ajay Kumar Singh, who is currently posted as Area General Manager in the ECL, as Director (Technical). However, it will take at least another two months for Singh to take charge of the post. “And who knows, his appointment might also get stuck up,” a source says.
 
WHO IS RESPONSIBLE?
The entire chain of events raises some pertinent questions. Did the CVC intentionally delay Chakravarty’s vigilance clearance? Why the ACC gave its nod to scrap the panel flouting the established guidelines? When after one month of the scrapping of the panel, Chakravarty got the vigilance clearance, why did not the ACC revise its decision? Was there a vested agenda at work? Also when the Coal Secretary himself admitted that the immediate relieving of Chakravarty from the post of Director (Technical), ECL will seriously affect the performance of the company, why did not the ACC pay heed to his request? Does not the entire event scream of a conspiracy?
 
The ECL is without a permanent CMD from June 1, 2015. Also the company has been functioning without any Director (Technical) since March 1, 2016. Now only two permanent functional Directors – Director (Personnel) and Director (Finance) – are running the ECL, a company which is highly complex in terms of technology and the safety point of view. “As a result, the company is performing miserably during this financial year,” sources say. 
 
In ECL control there are many small mines which were nationalized.  During the course of time the risk of fire and inundation has increased as these mines were not scientifically designed. Many of these mines are using old equipment and structures and are highly technically challenged. The absence of a technical man at the top of the PSU may prove to be fatal and disastrous for its future. Experts opine that the tender state of the company having recently come out of the BIFR fold will take a severe hit due to the entire fiasco and the PSU will again fall in the vicious cycle of perennial loss very soon.
 
The action of the CVC, the Coal Ministry and the ACC in the ECL CMD case is not only a betrayal of public aspirations but also undermines the effectiveness of other deserving employees in the PSU. There is not an iota of doubt that the arbitrary decision of the Coal Ministry and the ACC would erode the employees’ morale in the ECL. Can there be any explanation other than timorous self-interest for trespassing the prescribed norm to stall the ECL CMD’s appointment? Or whether the bureaucrats involved in the process failed to perform their duty because of the political lobby to which they eventually have to report. The same political lobby that ties their hands and gags their mouths. If yes, then what kind of a system of governance the Indians have voted for?  
 
The citizens of India have expectations of transparent and corruption-free governance from the Narendra Modi Government. The bureaucrats in the PMO should understand that it was high time they worked towards making the Government more open and transparent. The writing is on the wall. 

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