Mr Goenka, chairman of CESC, has complained against one subsidiary of Coal India Ltd to Sontosh Mohan Deb, a former Union steel minister who heads the committee.

However, the coal ministry's findings are contrary to what Mr Goenka had stated in a letter to Mr Deb dated September 5, 2000.

Writing the letter as a member of Parliament, ostensibly to discuss "problems with subsidiaries of Coal India", Mr Goenka has annexed a note that puts forth the case of CESC.

The note annexed to the letter points out that "we" have identified three coal blocks next to the one already allotted to CESC for feeding its 2X250mw Budge Budge thermal power plant.

Mr Goenka said: "We identified three coal blocks adjacent to the Sarishatali (north-east part of Gourandih-D, Gourandih Extension, Kasta West)." According to him, the Sarishatali project is about to reach financial closure and mining will begin from mid 2001.

Mr Goenka has argued that the allocated block Sarishatali has mineable reserves of 55 million tonnes up to a depth of 150 metres, and will be able to supply Budge Budge for only 16 to 17 years, against the plant's life of over 30 years.

The coal ministry's fact file, on the other hand, shows that Sarishatali has close to 140 million tonnes (mt) of proven reserves, of which 74 mt can be extracted cheaply via the opencast method and the rest via underground mining. According to a source at Eastern Coalfields Ltd (ECL), this reserve is "sufficient for more than 30 years". Accordingly, the ministry is understood to have been told that there is "no justification for additional new blocks."

Earlier, CESC had been allotted a mine in the Asansol area, for which it has spent Rs 15.88 crore according to the annual report for the year to March 31, 2000. The report states that this mine is being developed and the Washington-based International Finance Corporation has approved financial assistance.

Mr Goenka, apart from seeking more mining blocks for the Budge Budge plant, has outlined two "problem" areas in the current supply arrangements and made certain allegations against ECL.

He has alleged that ECL has often failed to supply the grade contracted for, and threatens to stop supplies if this is pointed out. CESC's attempt to "deduct money on this account in the past failed because of coal companies' threat to stop supplies immediately upon such action," the letter notes. ECL has gone "on record refusing to accept CESC's claim for grade slippage," according to Mr Goenka.

On this point, the coal ministry replied that CESC's complaint had been discussed between the company and ECL on July 5 last year, and a deduction of 50 per cent was agreed upon.

ECL clarified to the ministry that Mr Goenka's allegation about ECL unilaterally scrapping sampling arrangement is "not a fact". ECL is understood to have said that a new third party had been selected for the joint sampling, and the agreement was signed on October 28 last year.

On a pricing agreement, CESC is understood to sought a model that is not acceptable to either Bharat Coking Coal Ltd (BCCL) or ECL, which have to follow guidelines for central public undertakings.

In a letter to the ministry, BCCL had pointed out that various provisions of the CPU model have been agreed except the ones concerning payment. "CESC has been insisting for a provision different from the CPU model on this subject on which BCCL has reservations," according to the letter, by BCCL's acting chairman and managing director Ashok Mehta.