- CAG Exposes Coal Scam
making 2G scam smaller
Courtesy: India TV News
CAG Exposes Coal Scam, Says Rs 10.7 Lakh Cr Lost By Not Auctioning Coal Blocks To Pvt Companies
22 Mar 2012,
New Delhi, March 22: The Comptroller and Auditor General (CAG) in its draft report titled ‘Performance Audit of Coal Block Allocations’ has said that the government has extended “undue benefits” totalling a mind-boggling Rs 10.67 lakh crore to commercial entities by giving them 155 coal acreages without auction between 2004 and 2009, the Times of India reported.
About 16 months after it rocked the UPA government with its explosive report on allocation of 2G spectrum and licences, the CAG in its draft report says the beneficiaries include some 100 private companies, as well as some public sector units, in industries such as power, steel and cement.
The CAG-estimated loss figure of Rs 10.67 lakh crore at March 31, 2011 prices is six times that of its highest presumptive loss figure of Rs 1.76 lakh crore for the 2G scam.
This, it says, is actually a conservative estimate, since it takes into account prices for the lowest grade of coal, not the median grade.
CAG says even by the price levels prevailing at the time of allocations, the estimate of loss would be over Rs 6.31 lakh crore.
Here’s how the auditor has calculated the “windfall gains”.
First, an estimate of the cost of production for each block was arrived at by taking into account the actual cost of production in a similar Coal India mine for the same year.
Then the difference between CIL’s sale price and cost of production was multiplied by 90% of the reserves in each block. The figure thus obtained was the windfall gain for that block.
The CAG report says: “While appreciating the constraints and the viewpoint of the ministry, the fact remains that coal being a natural resource ought to have been allocated to private players on competitive bidding as it brings in more transparency and objectivity in the system.”
However, Congress MP and industrialist Naveen Jindal says: “For all these 155 blocks, coal India did not have any mining plans as it found them unattractive..CAG may have its view but whether it is JSPL or any other private company, they are all Indian entitites and creating wealth for the country.”
The CAG report says; “...The State legally owns the natural resources on behalf of citizens and the natural resources cannot be allocated to private hands without ensuring that the benefit of low cost of the natural resources would be passed on to the citizens.”
The report further says: “The object should be to serve the public cause and to do the public good by resorting to fair and resonable methods. Every action/decision of the State...to give largesse/confer benefits must be sound, transparent, discernible and well well-definied policy.”
The TOI report says, among the major private sector beneficiaries are Tata Group entitites, Jindal Steel & Power Ltd, Electro Steel castings Ltd, the Anil Agrawal group (Vedanta) firms, Delhi-based Bhushan Power & Steel Ltd, Jayaswal Neco Nagpur-based Abhijeet group And Aditya Birla Group companies, Essar group’s power ventures, Adani Group, Arcelor Mittal India, Lanco group and several other small to medium players.
A major player in power Reliance Power which is setting up the Sasan and Tilaiya ultra-mega power prijects is missing from the list, because the section on “Windfall benefit to private companies” does not include 12 coal blocks given for the government’s showpiece power projects as they were allocated through a tariff-based competitive bidding route, says the TOI report.
Post your comments to Facebook
Designed and maintained by AKR Consultants