CAG has estimated 'undue benefits' of over Rs3.8 lakh crore to private parties in coal blocks allotment without bidding, Delhi airport development and diversion of coal to RPower
New Delhi: Already under attack over various scams, the Indian government on Friday faced a fusillade from the Comptroller and Auditor General (CAG) which has estimated "undue benefits" of over Rs3.8 lakh crore to private parties in coal blocks allotment without bidding, Delhi airport development and diversion of coal to a power project, reports PTI.
The CAG attack came when three of its reports on coal allocation, development of Delhi airport by GMR-led DIAL and ultra mega power project of Reliance Power Ltd were tabled in Parliament today.
The CAG, however, brought down the estimated loss in the allocation of 142 coal blocks since July 2004 from Rs10.7 lakh crore in the draft report to over Rs1.85 lakh crore being the benefit to private allottees.
The CAG has estimated a potential earning capacity of Rs1.63 lakh crore to Delhi International Airport Ltd (DIAL) when it was given Delhi airport land on a concessional lease.
The Prime Minister, who held the coal portfolio for a considerable time during the period also escaped any adverse notice of the official auditor and the blame fell on the Screening Committee consisting of officials for the allocation "which lacked transparency, objectivity and competition".
The beneficiaries of coal block allocation included Essar Group, Jindal, Adani, ArcelorMittal and Tata Steel.
The Opposition was quick to capitalise on the CAG reports with BJP demanding the resignation of Prime Minister Manmohan Singh taking "moral, political and personal" responsibility for the wrongful loss due to coal block allocations.
The auditor slammed the Civil Aviation Ministry and Airport Authority of India (AAI) for allowing DIAL to levy a development fee on passengers that would give it over Rs3,415 crore "vitiating the sanctity of the bidding process".
DIAL had just made an equity contribution of Rs2,450 crore and use the development fee to part fund the project.
The CAG was also critical of allowing Reliance Power to divert coal meant for Sasan ultra mega power project in Madhya Pradesh to its other plant, thereby giving it a benefit of Rs29,033 crore.
Dealing with captive coal mining, envisaged to encourage private sector participation, the CAG said till 1993 there were no specific criteria for allocation of coal blocks.
Most of the allocation were done on the basis of letters of recommendations from state governments.
"The process of bringing in transparency and objectivity in the allocation process of coal block, which commenced from June 2004, got delayed at various stages and same is yet to materialise (February 2012) even after lapse of 7 years," it said adding in the mean time 194 net coal blocks were allotted to different government and private parties upto March 2011.
"The financial impact of the benefit to the private allottees has been estimated to the tune of Rs1.85 lakh crore as on March 2011 for open cast (OC) mines/ OC reserves of Mixed Mines.
"The government could have tapped a part of this financial benefit by expediting decision on competitive bidding for allocation of coal blocks," the CAG report said.
However the Government rubbished the reports with Coal Minister Sriprakash Jaiswal saying they were not in agreement with the CAG calculation while Minister of State in the PMO V Narayanasamy said the auditor has not followed the Constitutional mandate.
"I am not going to say anything on the merit of this. Because unfortunately CAG has got a mandate under the Constitution. According to me, the CAG is not following its mandate, which I feel, I wish to bring to notice," Narayanasamy told reporters.
Narayanasamy insisted that the CAG reports were incomplete as they were not yet examined by Parliament's Public Accounts Committee (PAC). "They (CAG reports) have to be tested before Parliament. It comes before the PAC. The PAC is like a mini-parliament. It will consider the views of political party members. Then only it will become final. Therefore, draft report will not become final," he said.
The Lok Sabha and Rajya Sabha sent a clear message that people of northeast had nothing to worry and everything will be done to make them feel safe
According to the Tata group chief, shortage of domestic coal and expensive gas are among the concerns which need to be sorted out and there should be policy action to encourage gas-based power projects