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AUG 18 2012

Govt refutes auditor's report on coal blocks

  • Economic Times, ET Bureau / Hyderabad
  • Created: Sat 18th AUG 2012

Jaiswal says allocation was done in transparent manner

Rejecting the Comptroller and Auditor General report, the Government said that coal block allocations to private firms such as Tata Steel and Jindal Steel were done in a transparent manner.

“There could not have been a better policy than this,” said Coal Minister Sriprakash Jaiswal, defending the coal block allocation.

The CAG has come to the conclusion that Coal Ministry did not put in place a competitive bidding mechanism for allocation of coal. The policy was proposed in 2004. But the competitive bidding process could not be taken up then due to conflicting legal opinions, Jaiswal said. Also States such as Rajasthan, Chhattisgarh and West Bengal had opposed the competitive bidding process then, he said. Stating that his Ministry does not agree with the CAG report, Jaiswal said the auditor’s assessment was based on only a few aspects of coal allocation. He sought to term the Rs 1.86-lakh-crore loss to exchequer as estimated by the CAG as ‘notional’.

Of the 57 coal blocks allocated to private companies, only one has been operational, which the CAG took up for audit, Jaiswal said. The Coal Ministry has started the review of the un-operative blocks since 2009 and has started de-allocating them, Jaiswal said. So far, 25 blocks allocated to various entities have been de-allocated, officials said.

The coal blocks allocated as per the recommendations of the screening committee that consisted of representatives from the various State Governments was aimed at boosting the economic growth. The private companies were roped in to develop the blocks as Coal India was unable to meet the fuel requirements of the growing economy.

Justifying the two blocks allocated to Tatas and the Jindal Steel and Power Ltd for their coal-to-liquid projects, Jaiswal said they were aimed at reducing the dependence on crude imports.

The Coal Minister said his Ministry has started the process of competitive bidding and has notified the rules in February. CRISIL has been engaged to prepare the bid document, the agreement to be signed by the allottee and fix the reserve and floor price for the blocks, officials said.

Tags

Rajasthan West Bengal Sathavahana Ispat Ltd,A.P. Jindal Steel and Power Ltd Comptroller and Auditor General Coal Sriprakash Jaiswal CRISIL Power

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