Coal news and updates

CAG finalises draft report on e-auctions of coal blocks

The Comptroller and Auditor General has finalized its draft report on the e-auctions of coal blocks allocated by the NDA government and is likely to table the report in the forthcoming winter session of Parliament.

This would be the first report by the federal auditor on the Modi government's allocation of natural resources, a performance review of its policies like the appraisal report prepared by the auditor for UPA's 2G spectrum allocation and Coalgate.

The auditor has looked into allegations of cartelisation in award of coal blocks through e-auctions. After allegations of cartelisation surfaced, the NDA government had cancelled coal blocks allocated to Naveen Jindal group on the grounds of alleged riggings.

A source said the auditor has reviewed all bidding documents and whether fair practices were adopted in allocation of mines through the new process. The government had claimed that e-auctions had fetched almost Rs 2 lakh crore on award of just 33 blocks which were allocated by UPA for free.

At least 155 coal blocks were allocated during UPA regime between 2004 and 2009 where private companies were alleged to have made windfall gains of more than Rs 1.86 lakh crore, according to a CAG report of 2012. The CBI had later investigated the case and the apex court cancelled those allocations on charges of irregularities.

The CAG's audit on the e-auctions began in the first week of May this year. The auditor looked into the methodology adopted in fixing base price for each block and the bidding price of companies. The auditor is looking at whether the base priced fixed for each block was right or much below the benchmark and if allowing multiple group companies to bid for same block adhered to transparency guidelines.

After three rounds of e-auctions, the government had a rethink on allowing multiple bids for a block by group companies as they may have encouraged price rigging and cartelisation. On these suspicions, the government had rejected the winning bid of a Naveen Jindal group firm for Gare Palma blocks.

During the e-auctions, Vedanta group companies had made 25 bids for 14 coal producing blocks. The Aditya Birla group put in 15 bids for eight blocks and Jindal Steel and Power had put in 13 bids for six blocks.

source: http://timesofindia.indiatimes.com