The Comptroller Auditor General’s (CAG’s) performance audit report on the allocation of coal blocks has dropped the names of 19 private companies or groups of companies on the ground that it does not have the relevant data to calculate windfall gains.
The final CAG report, placed in Parliament today, also recalculated the loss to the government exchequer as per the rates prevailing in the year of allotment of the coal blocks. This is how CAG brought down the initial loss computed in its draft report at Rs 10.7 lakh crore (as per coal prices prevailing on 31 March 2011) to Rs 1.86 lakh crore.
Even so, CoalGate replaces 2G as the mother of all revenue-loss scams. In 2G, the loss was computed at Rs 1,76,000 crore (Rs 1.76 lakh crore). CAG’s key claim is that most of the blocks were allotted through a non-transparent process, and in the process many companies, including Reliance Power and the Tatas, among others, made unintended gains.
The draft report had listed 76 private companies, while the final CAG report lists 57. And the windfall gains were calculated at Rs 4.8 lakh crore in the case of private companies in the draft report.
“Out of 75 allottees, 57 allottees were allotted (coal) blocks with open cast/mixed mines. The financial impact of the benefit to private allottees has been estimated confining to open cast reserves of mixed mines only,’’ the final CAG report says.
The report says that it doesn’t have reliable data for operating underground mines and thus it is not possible for it to calculate windfall gains to these 19 companies.
However, it observes that “underground mines are rich with superior grades of coal and private allottees may have an advantage over the cost of production by introducing new mining technology, etc.’’
Interestingly, the draft CAG report had given data for all the underground mines and had named 19 groups of companies that received undue benefits.
These companies are Sunflag Iron and Steel (Rs 355 crore), Jindal Stainless/Shyam DRI (Rs 10,419 crore), Gupta Metallics and Gupta Washeries (Rs 270 crore), Bankura DRI Mining Manufacturing Pvt Ltd (Rs 2,315 crore), Chaman Metalliks Ltd (Rs 31 crore), SKS Ispat Ltd (Rs 3,038 crore), Prism Cement Ltd (Rs 162 crore), Pushpa Industries (Rs 983 crore), Jaiprakash Associates Ltd (Rs 3,485 crore), Rathi Udyog Ltd (Rs 6,224 crore), Mesco Steel (Rs 353 crore), Kamal Sponge Steel & Power/Revati Cement (Rs 914 crore), Maharashtra Seamless Ltd/Dhariwal Infra Ltd (Rs 1,160 crore), Sunflag Iron & Steel/Dalmia Cements (Rs 1,350 crore), AMR Iron and Steel Ltd/Century Textile & Ind/JK Cements Ltd (Rs 477 crore), Monet Ispat & Energy Ltd/Topworth Steel Ltd (Rs 2,380 crore), Bhushan Steel Ltd/Jai Balaji Inc/Rashmi Cement (Rs 15,967 crore), Ramswarup Lohh Udyog/Adhunik Corp, Uttam Galva Steel and Howrah Gases/Vikas Metals Power/ACC (Rs 15,633 crore) and JSPL/Monet Ispat/Energy Ltd (Rs 1,797 crore).
Among prominent names of private companies listed by the final CAG report, Abhijeet Infrastructure Ltd was allotted three coal blocks in Jharkhand in 2005. Present Coal Minister Sriprakash Jaiswal has personal ties to the proprietors of Abhijeet Infrastructure Ltd, but he was not the minister when the mines were allocated to the company. Abhijeet Infrastructure Ltd got Rs 52 crore as windfall gains, the CAG report says.
Other prominent private companies listed by the CAG report are Usha Martin Ltd, Essar Power Ltd, Rungta Mines Ltd, Adani Power Ltd, Jindal Photo Ltd, Jindal Steel and Power Ltd, GMR Energy, Tata Sponge and Tata Steel Ltd. Tata Steel Ltd was allocated three coal blocks and its windfall gains stand at Rs 254 crore.
The final CAG report has also not mentioned the benefits of Rs 5.9 lakh crore extended to government companies apparently on the ground that windfall gains should be calculated only in the case of private companies. The CAG report also dropped the names of private companies having joint ventures with the government companies.
Thus, the final CAG report arrived at the conclusion that the total losses are Rs 1.86 lakh crore on the basis of coal prices that existed in the year of allocation.