Coal block allocations made by best screening committee: Minister

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SME Times News Bureau | 18 Aug, 2012
The union government Friday refused to agree wholly with the official auditor's report on coal block allocations and defended its screening committee as the best and its recommendations beyond reproach.

Objecting to the Comptroller and Auditor General's (CAG) calculations on losses pertaining to coal blocks, Coal Minister Sriprakash Jaiswal said, "There cannot be a better committee. It decided on allocations (of coal blocks) and one cannot question the screening committee's recommendations."

In the report tabled Friday in parliament, the CAG said that lack of transparency in the allocation of coal blocks to private players resulted in a loss of a whopping Rs.1.85 lakh crore ($37 billion) to the exchequer as on March 11 last year.

This was because the process of bringing transparency in the award of coal blocks that was to commence in June 2004 got delayed due to various reasons.

The government says the auditor has ignored crucial factors in its report on coal - that the cost of extraction of coal varies from mine to mine, for example, and that underground mines yield less coal than others.

The screening committee for making allocations is composed of officials at the highest level from the union as well as state governments, and includes the chairman of Coal India and the chairman and managing directors (CMDs) of various subsidiaries.

The minister said the government ensured transparency by placing ads for the coal blocks that were available for allocation. Companies that responded were evaluated by a screening committee.

The auditor's report, however, states that the committee has not listed how it chose companies.

The minister also pointed out that of the 57 allocations found irregular by the CAG, only one coal block had become operational.

Of the 195 coal blocks allocated to public and private sectors, so far only 30 have started production. The remaining blocks are in various stages of obtaining statutory clearances and mining lease, preparing mining plans and acquiring land, machinery and equipment.

The coal sector has been in focus for its production and offtake, especially in the wake of the worst blackout the country faced earlier this month.

Jaiswal said that an inter-ministerial group is currently going into the issue of allocations. In event of wilful delay in the development of coal blocks, the government retains the right to de-allocate the said block.

As on date, the Government has de-allocated 25 coal blocks.