New Delhi: In a shocking revelation that may give embarrassment to the ruling establishment, the Comptroller and Auditor General (CAG) on Friday tabled its reports on three crucial sectors including coal block allocation, Delhi International Airport and ultra mega power project, claiming a total loss of over Rs 2.6 lakh crore incurred by the government in the wake of malpractices unearthed in these fields.

BJP for PM's reply on CAG coal report

CAG report on coal

Tabling the crucial report on coalgate, the CAG told the Parliament that the allocation of coal blocks on nomination basis instead of competitive bidding has given undue benefits of around Rs 1.86 lakh crore to private firms, which amounted to the loss to national exchequer.
The CAG in its report 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.

CAG report on Delhi Airport

Slamming the levy of development fee on passengers using Delhi Airport, the CAG told the Parliament that the Civil Aviation Ministry violated the bid conditions for the benefit of GMR-led DIAL to the tune of over Rs 3,415 crore and pressed fixing responsibility.
CAG in its audit report on Indira Gandhi International Airport said DIAL can potentially earn Rs 1,63,557 crore over a 60-year period from the land given to it on a lease of Rs 100 per annum.
Allowing DIAL to levy Development Fee vitiated the sanctity of bidding process and led to undue benefit of Rs 3,415.35 crore to the private firm, it said.
GMR Infrastructure holds 54 percent stake in Delhi International Airport Ltd (DIAL).
"It was noticed that Ministry of Civil Aviation and Airport Authority of India, on some occasions, violated the provisions of the transaction documents in the interest of the concessionaire," the official auditor said.
CAG said contrary to provision of the airport concession agreement, DIAL was allowed to use the amount collected as Development Fees to meet the project costs. "In face, only 19 percent of the project cost came from equity, approximately 42 percent came from debt. The remaining project costs were met from security deposits and Development Fees".
"Whenever DIAL raised an issue regarding revenue to accrue to it or expenditure to be debited to government in contravention to the provisions of Operation Management Development Agreement (OMDA), the Ministry and AAI interpreted the provisions always in favour of the operators and against the interest of the government," it said.

CAG report on power

Flaying post-bid concessions to Reliance Power, the CAG said that the Anil Ambani-led firm got undue benefit of Rs 29,033 crore when the government allowed use of surplus coal from blocks alloted to Sasan power plant for its other projects.

CAG in its report said subsequent to award of the 4,000 MW Sasan ultra mega power project to RPL, the government granted permission to the company to utilize the surplus coal from three mines attached to the projects for the group's Chitrangi project in Madhya Pradesh.

"A reading of all the clauses in the allocation letters together conveyed that clauses were inserted in the coal allocation letter as a safegaurd measure to prevent misuse of coal by the developer.

"The permission to use surplus coal in other projects of the bidder after award of the contract based on acceptance of the lowest tariff, vitiated the sanctity of the bidding process which would result in post bid concessions to the developer having significant financial implication," it said.

CAG said the permission to use of excess coal from Moher, Moher Amlohri and Chhatrasal blocks allocated to RPL's Sasan power project after its award "not only vitiated the bidding process but also resulted in undue benefit to RPL".

"This decision resulted in financial benefit of Rs 29,033 crore with a net present value of Rs 11,852 crore to the project developer (RPL)," the official auditor said.

CAG said it was not clear how Power Ministry in October 2006 came to the conclusion that two initially allocated blocks for the Sasan project (Moher and Moher Amlohri) would be inadequate to fire the 4,000 MW plant.

"The basis on which Ministry of Coal was prevailed upon in October 2006 itself to allot an additional block (Chhatrasal) of coal to Sasan ultra mega power project by de-allocating it from the public sector NTPC is not clear," it said.


Latest News from India News Desk