A bigger 'scam' than 2G spectrum auction ;CAG shows coal allocation


At Rs 1.86L cr, CAG shows coal allocation is a bigger 'scam' than 2G spectrum auction

CAG says Rs 1.86 lakh crore likely to accrue to private coal block allottees due to allocation made without competitive bidding - previous figure of loss to country released by CAG had been over Rs 10 lakh crore.
 PMO downplays CAG report and slams the CAG.
CAG is not following its mandate, says MoS PMO V Narayanasamy.

 The Prime Minister's Office (PMO) says the CAG report on coal block allocation is preliminary and has to be tested.

CAG tabled three reports in Parliament today - total loss to govt in all three pegged at Rs 2.5 lakh crore.

On coal:  CAG says Rs 1.86 lakh crore likely to accrue to private coal block allottees due to allocation made without competitive bidding - previous figure of loss to country released by CAG had been over Rs 10 lakh crore.

The 2G spectrum scam was lesser than this amount by a bit. CAG's spectrum loss was pegged at Rs. 1.76 lakh cr. This was referred to as 'completely erroneous' by Telecom Minister Kapil Sibal.

On Ultra Mega Power Project (UMPP):* CAG says bidding process was vitiated by allowing Reliance Power to use excess coal from three blocks allocated to Sasan project - gained Rs 29,003 crore.

On aviation:  In the so-called Delhi Airport scam, CAG slams levy of development fee on passengers at Delhi Airport; says it vitiated sanctity of bidding process.

CAG says DIAL to get undue benefit of Rs 3,415.25 cr from levy of development fee on passengers at Delhi Airport.


Three crucial CAG reports on coal block allocation, implementation of public-private partnership in IGI Airport and ultra mega power projects were tabled in the Parliament on Friday, which alleged huge losses to the exchequer were caused by PM Manmohan Singh-led UPA govt.

CAG says benefit of this money should have gone to the people of India/govt but instead it has gone to private companies.

To put things in perspective, the 'benefits' that are going to accrue to these companies will be over a period of 20 years and not immediately.

Opposition parties are accusing the UPA govt of looting the public in the name of opening up of the economy. The BJP has said that govt has broken all previous corruption records.

According to reports, the CAG is believed to have concluded that 25 private sector companies such as Hindalco, Tata Group entities (Tata Steel, Tata Power), Jindal Steel & Power, Anil Agarwal Group firms, Essar Group''s power ventures, Adani Group, Arcelor Mittal and Lanco were the major beneficiaries.

CAG estimates Rs. 1.86 lakh crores loss to exchequer on allocation of coal blocks. The Prime Minister, Dr. Manmohan Singh, held the coal portfolio between 2006-09.

The CAG draft report on implementation of public-private partnership in IGI Airport had claimed that the Delhi International Airport Ltd (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 percent, Frankfurt and Malaysian airports 10 percent each.


As per the draft CAG report, DIAL was leased 4,799.09 acre by the AAI, of which 239.95 acres were allowed for commercial exploitation for Rs 100 a year.

CAGSpeak: "Delay in introduction of the process of competitive bidding has rendered the existing process beneficial to the private companies. Audit has estimated financial gains to the tune of Rs 1.86 lakh crore likely to accrue to private coal block allottees," CAG said in a report on allocation of coal blocks.

The CAG said it has arrived at the estimates based on the average cost of production and average sale price of opencast mines of Coal India in the year 2010-11.

"A part of this financial gain could have accrued to the national exchequer by operationalising the decision taken years earlier to introduce competitive bidding for allocation of coal blocks," CAG said.

The auditing body said it is "of strong opinion that there is a need for strict regulatory and monitoring mechanism to ensure that benefit of cheaper coal is passed on consumers".

The concept of allocation of captive coal blocks through competitive bidding was announced in 2004. However, government is yet to finalise the modus operandi of competitive bidding.

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