The Comptroller and Auditor General of India’s report on the allocation of coal blocks, which is likely to be tabled in Parliament today, has reportedly pegged the loss from non-transparent allocation of coal blocks at Rs 1.86 lakh crore and may recommend penalties and disincentives for non-performers and reward performers with coal blocks.
The report, however, exonerates the Prime Minister’s Office from any wrong-doing and holds the steering committee dealing with the subject responsible for the lapse.
Prime Minister Manmohan Singh held the coal portfolio between 2006 and 2009. However, a report in the Economic Times said CAG may pull up the coal ministry for not monitoring the progress of mines periodically and its Kolkata-based department, the office of the Coal Controller, for not conducting any field inspections.
149 blocks were allotted to several private companies during 2004-2006, out of which 15 blocks that were given to private players did not start production till 2011. Reuters
As many as 149 blocks were allotted to several private companies during 2004-2006, out of which 15 blocks that were given to private players did not start production till 2011. Some of them sold off the blocks at astronomical prices.
The coal ministry had last year cancelled 24 allocations for delays in development and is currently issuing show-cause notices to 58 companies, threatening cancellation of allotments.
CNN-IBN, which has accessed the CAG report, named Tata, Naveen Jindal, Essar, Abhijeet, Arcelor and Vedanta groups as the beneficiaries of this flawed allocation. The Tatas and Jindals are alleged to be the biggest beneficiaries.
A report in Business Standard has also alleged undue benefits of Rs 15,849 crore extended by the government to Reliance Power by way of surplus allocation for two of its UMPPs.
The CAG report has also asserted that not spelling out the terms of the usage of surplus coal upfront has contributed to handing over undue benefits to the allottees “to the detriment of the ultimate power consumers.” And it is this ambiguity which allowed bidders like Reliance Power to interpret the clauses for usage of the surplus coal and vitiated the process of allocation.
Another CAG report that is set to rock Parliament pertains to the implementation of public private partnership projects at Delhi International Airport Ltd (DIAL). The draft report says DIAL was given land at a highly concessional lease rent. DIAL is a joint venture consortium in which the GMR group holds 54 percent, Airports Authority of India (AAI) 26 per cent, and the Frankfurt and Malaysian airports 10 percent each.
Going by the three reports, the UPA government surely has a lot to worry about and the coal, power and aviation ministries are ready with a strong defence. Another report in the Economic Times today said government would label CAG’s calculation of financial gains to private companies as misleading since there are wide variations in the extractability even in mines located in the same coal fields.
Secondly, on the issue of diversion of coal from mines allocated to Reliance Power for the Sasan ultra mega power plant, the power ministry is going to use a high court ruling validating the biffing procedure to its advantage.”The attorney general’s opinion, who said the decision to allow surplus coal to be used for a power plant being set up by RPL at Chitrangi, was well-considered and need not be reviewed,” the report said.
And last, the government is likely to challenge CAG on “factual inaccuracies” in its report on privatisation of the Delhi airport.”The so-called post-contractual benefit given to GMR, which is said to be a part of the CAG report, is “grossly misleading” and hypothetical. The government is likely to argue that by the same calculation, the Airports Authority of India is likely to gain Rs 3 lakh crore over the same period of 54 years on account of the gross revenue share of 45.99 percent,” the report said.
