Pvt firms gain Rs 1.86 L-cr getting coal blocks on nomination
Published on August 17, 2012 under News
New Delhi(PTI): Government auditor CAG today said private firms are likely to gain Rs 1.86 lakh crore from coal blocks that were allocated to them on nomination basis instead of competitive bidding, which amounted to the loss to national exchequer.
The CAG in its report, tabled in Parliament, names 25 companies including Essar Power, Hindalco, Tata Steel, Tata Power and Jindal Steel and Power which have got the blocks in various states.
“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.