Coal ministry’s evidence to PAC inconclusive: CAG

CAG says screening committee didnt consider many factors

A fresh turf war has erupted between the Comptroller and Auditor General (CAG) and coal ministry. The audit watchdog has alleged that the ministry has failed to furnish conclusive evidence to the Public Accounts Committee (PAC) to establish that an inter-ministerial panel had recommended allocation of coal blocks in a transparent and objective manner.

The CAG says that the minutes of the screening committee meeting (SC),which vetted allocation of coal blocks,reveals that it did not considered factors such as the techno-economic feasibility,preparedness and track records of applicants while making recommendations,the CAG said.

In the absence of comparative statement for evaluation of various applicants for one block and their presentations,it cannot be said that transparency and objectivity was ensured by the SC, the auditor has told the PAC in a letter on September 18.

Story continues below this ad

The CAG had,in a report in August last year,alleged that allotting coal blocks during 2004 to 2009 through nomination basis rather than through competitive bidding may have led to private firms gaining about Rs 1.86 lakh crore.

The report triggered a nation-wide controversy and the opposition parties disrupted parliament proceedings following which the government ordered a CBI probe.

The CAG told the PAC that the coal ministry has given evasive reply on the actions taken on the Shankar Committee report,which among other things,had suggested granting exploration-cum-mining leases in line with the new exploration licensing policy of the oil sector and e-auctioning extra coal production.

The CAG asked the PAC to ascertain from the coal ministry as to why in case of Fatehpur coal block only 36 applicants were asked to furnish presentations before the 35th meeting of the screening committee out of 69 applications. Similarly,in case of Rampia and dip side of Rampia only two applicants gave their presentations out of 108 applicants.

Story continues below this ad

The coal ministry had sought to refute the CAGs contention that private allocattees may had gained nearly Rs 1.86 lakh crore as 57 blocks were not auctioned,saying that the basic intent of the government behind the allocations was not to generate revenue.

The CAG has countered by saying the ministrys directive in June 2012 to the power sector block holders to participate in bids floated by discoms and entering into power purchase agreement with them amounted to a rectificatory action.

Similarly,in August 2013,the coal ministrys letter to chief secretaries of coal-bearing states to incorporate a condition of mandating the independent power producers to participate in bids by discoms in a time bound manner also amounted to a similar action.

The rectificatory actions of coal ministry underlined that private parties allocated coal blocks had benefited over those who sourced coal from open market, the auditor told the Public Accounts Committee.