Coal news and updates

Coal block auction shows CAG got figure right

Auction of 33 coal mines in two tranches is expected to generate revenue of a little more than Rs 2 lakh crore. But if royalty and upfront payment are taken out, the revenue flow stands at Rs 1.83 lakh crore, just a tad short of Rs 1.86 lakh crore windfall to allottees projected by the federal auditor that was first reported by TOI on May 22, 2012.

"The total estimated amount of revenue likely to be generated from 33 coal mines already auctioned is Rs 2,09,740 crore," minister of state for power and coal Piyush Goyal told Lok Sabha in a written reply on Thursday.

The minister said six major coal producing states, including Odisha, Jharkhand and Chhattisgarh, are likely to get Rs 1.83 lakh crore as e-auction proceeds and Rs 25,029 crore as royalty. Besides, these states would get Rs 1,100 crore towards upfront payment. "In addition, power cost will reduce by approximately Rs 96,971 crore resulting in power tariff savings for consumers," he said.
On March 22, 2012, TOI first reported a pre-final draft of the CAG report, saying the government extended "undue benefits" totalling a mind-boggling Rs 10.67 lakh crore to commercial entities by giving away 155 coal blocks without auction between 2004 and 2009. The beneficiaries included some 100 private companies, as well as some public sector units, in industries such as power, steel and cement.

The final report, however, put the windfall gain to only private entities at Rs 1.86 lakh crore. This was done after the coal ministry suggested that blocks given to state entities or joint ventures and ultra-mega power projects be kept out of the audit purview since these were scrutinized separately.

Meanwhile, the government cancelled the proposed e-auction of Jamkhani block in Odisha, which was scheduled to go under the hammer on Friday as the last mine in the second tranche of auctions. The decision was taken in view of an ongoing case in the Delhi high court involving the mine.

source: http://timesofindia.indiatimes.com