CAG-CoalMin slugfest may push back auction schedule

Dec 06 2012, 10:16 IST
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Summary* Auditor says Screening Committee system for awarding block opaque

The process of switching over to an auction model for handing out coal blocks could be delayed further. The coal ministry and the Comptroller and Auditor General (CAG) have got into a furious spat in the wake of the latters audit report on the allocation of coal blocks, something that could potentially stymie the whole process of moving over to the auction model for award of blocks in future.

Accusing the ministry of concealing facts, the statutory auditor, in a missive to the coal ministry, has described the screening committee procedure as non-transparent.

Alleging that the ministry has failed to establish that the coal block allocations between 2004-09 were done in a fair and transparent manner, the CAG also argued that there is no evidence to suggest that the Screening Committee gave blocks in a transparent and objective manner.

In its written reply on November 19 to the coal ministrys rebuttal to its findings of purported gains of Rs 1.86 lakh crore accrued to private companies, the CAG has said there is no evidence shared by the ministry justifying that the Screening Committee actually assessed the applications in regard to issues like techno-economic feasibility of the end-use projects (EUPs), past track records of the developers in execution of projects and also their technical and financial capabilities.

The coal ministry has not furnished any documentary evidence justifying the Screening Committees recommendation for allocation of a coal block to a particular allocattee out of the total number of applicants for that block to justifying that blocks were allocated in a fair and objective manner to the most deserving applicants, the CAG said in its reply.

The statutory auditor argued that it received no documents to suggest that multi-layered consultations were conducted by the committee and asked the ministry to explain why it failed to detect such gross irregularities.

The public auditors views are significant in the light of the fact that both the ministry and the Congress party have been arguing that the Screening Committee route for allocation was a sacrosanct exercise and devoid of irregularities.

However, the CBI is currently examining the propriety of the allocations and has already registered FIRs against more than five companies.

The CAG said that the law ministry had vetted commencement of the competitive bidding process back in 2006, and added that the coal ministry in its reply to the Public Accounts Committee is silent on why it did not act

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