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Coal loss Rs 1.86L cr, Delhi airport 24K cr, power 29K cr: CAG

The Comptroller and Auditor General’s (CAG) reports on allocation of coal blocks without bidding and the Delhi airport concession given to GMR and power projects was tabled in Parliament on Friday.

Zeebiz Bureau

New Delhi: The Comptroller and Auditor General’s (CAG) reports on allocation of coal blocks without bidding and the Delhi airport concession given to GMR and power projects was tabled in Parliament on Friday.

The report says that 44 billion tonnes of coal was given away at throw-away prices, while 194 coal blacks were allocated on mere recommendations.

Importantly, as against the draft report, the final CAG report was silent on the role played by Prime Minister’s Office in allocation of coal.

The major beneficiaries included Tata Group entities, Jindal Steel & Power, Anil Agarwal Group firms, Essar Group's power ventures, Adani Group, Arcelor Mittal and Lanco.

"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.

"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".

Delhi airport

The CAG report on public-private partnership for the Indira Gandhi International Airport had reportedly said that Delhi International Airport (DIAL), which runs the utility, has a potential to earn Rs 1,63,557 crore over a 60-year period from the land given to it on a lease rent of Rs 100 per annum, hurting the interest of the government.

The report pointed out that 239 acres of land for construction of the terminal was given away to GMR Group owned Delhi International Airport Limited (DIAL) on lease as against the market rate of Rs 24000 crore rupees.

Also, even after getting land at such low rates, DIAL was charging User Development Fee from passengers using the airport. The CAG said that the company has made over Rs 3400 crore by way of UDF and that the clause allowing DIAL to charge UDF was not in the initial agreement but was later introduced by the civil aviation ministry.

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 per cent of the project cost came from equity, approximately 42 per cent 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.


The CAG also raised questions on some power projects in the country. On the Sasan Power Project of Reliance Power, the auditor said that differential tariff has led to a gain of Rs 29000 crore for the company.

CAG said bidding process was vitiated by allowing Reliance Power to use excess coal from three blocks allocated to Sasan project.

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

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".

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.

The audit estimated the financial benefit that will accrue to RPL on the basis of comparison of tariff of Sasan project (Rs 1.196 per unit) with that of Chitrangi project (Rs 2.450 for Madhya Pradesh and Rs 3.702 for Uttar Pradesh).

With PTI inputs

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