No loss to govt on coal blocks: CAG

Top auditor writes to PM’s office following uproar over an estimated loss of Rs 10.67 lakh crore due to alleged irregularities in allotment of coal blocks
Posted On Friday, March 23, 2012 at 02:25:12 AM
The draft CAG report pertains to 155 coal blocks across the country between 2004 and 2009
New Delhi: An initial audit report estimating Rs 10.67 lakh crore loss to the exchequer on account of allotment of coal blocks during 2004 to 2009 without auction caused an uproar in the Parliament on Thursday and was described as “exceedingly misleading” by the CAG himself.

Following a new article  on the draft report, the Comptroller and Auditor General wrote a letter to Prime Minister Manmohan Singh, excerpts of which were released by the PMO.

“In the extant case the details being brought out were observations which are under discussion at a very preliminary stage and do not even constitute our pre-final draft and hence are exceedingly misleading,” the CAG said in the letter.

The official auditor said,  “Pursuant to clarification provided by the Ministry (of Coal) in exit conferences held on February 9, 2012 and March 3, 2012, we have changed our thinking”.

“In fact it is not even our case that the unintended benefit to the allocatte is an equivalent loss to the exchequer. The leak of the initial draft causes great embarrassment as the audit report is still under preparation. Such leakage causes very deep anguish,” the CAG letter was quoted as saying by the PMO release.

In the leaked report on allotment of coal blocks, CAG had estimated a “windfall gain” of Rs 6.31 lakh crore (PSUs – Rs 3.37 lakh crore and private parties – Rs 2.94 lakh crore) based on the prices prevailing during the year of allocation on constant cost and price basis and as on March 31, 2011.

The amount at current prices would now work out to Rs 10.67 lakh crore (PSUs – Rs 5.88 lakh crore and private parties – Rs 4.79 lakh crore), the CAG said in the draft report.

The CAG report comes more than a year after its report on the allocation of 2G spectrum wreaked havoc on the UPA government. 

Both Houses disruptedA united Opposition attacked the UPA on the alleged coal scam, holding the PM responsible for it. 

BJP leader M Venkaiah Naidu said PM Manmohan Singh should clarify as he headed the ministry at the time when the alleged irregularities were committed. Samajwadi party, which extends outside support to the government and is also being sought by the UPA as an ally, also said the PM was answerable. 

Guidelines on bidding soon: govtThe government is almost ready to auction coal blocks through competitive bidding and the guidelines for this are likely in 2-4 months, Coal Minister Sriprakash Jaiswal said on Thursday.