Government Rejects CAG Report; Dubs Figures as Notional

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The government rejected the CAG report estimating a huge gain of Rs 1.86 lakh crore to private firms in allocation of 57 coal blocks, asserting the calculations were faulty and the gain notional.

Defending the coal allocations between 2005 and 2009 without competitive bidding, Coal Minister Sriprakash Jaiswal said that the method adopted was "transparent".

Addressing a press conference after placing of the CAG report in Parliament, Jaiswal said the auction route was not chosen as there were conflicting opinions from the Law Ministry in 2006.

Besides, there was strong opposition from Chhattisgarh, Rajasthan and West Bengal, then ruled by the BJP and the Left, against competitive bidding, he said.

These states had said this would result in increase in coal and power prices.

"The three governments said the existing system of allocation should not get changed at any cost... In the federal structure, we have to respect the opinions of state governments," the Coal Minister said.

He said the allocation process "was totally transparent, policy was entirely correct... If there is any irregularity, that is being investigated by the CBI".

About the estimated Rs 1.86 lakh crore likely gain to be made by the private parties, he said "This is notional. I am not here to challenge any authority. Their (CAG's) work is to conduct audit, government's work is to make policies and take decisions while taking care of people of the country."

The CAG report said that part of the money, from the 57 blocks allocated to the private sector, could have accrued to the national exchequer had the procedure of competitive bidding was put in place earlier.

"We are not in agreement with the CAG calculation in its entirety... When blocks are not operative,it is not a right idea to do calculation; it is faulty", he said.

Jaiswal said the private parties were involved in the development of coal blocks as the state-owned Coal India was not able to meet the growing requirements of the fuel.

"We felt that the country's coal requirement cannot be met by Coal India alone. The system of allocating coal blocks(to companies other than Coal India) was started. Therefore, the policy on coal blocks allocation was made. No policy could have been better than this," he said.

Since 1993, the allotment of coal blocks was done through a mechanism of Inter-ministerial Screening Committee. Headed by the Coal Secretary, the committee had representatives from the state governments, concerned ministries of the Central Government and the coal companies, an official statement said.

In the dock over three new CAG reports, Government stressed that these were not final and accused the auditor of not following its mandate.

"I am not going to say anything on the merit of this. Because unfortunately CAG has got a mandate under the Constitution. According to me, the CAG is not following its mandate, which I feel, I wish to bring to notice," Minister of State for Personnel V Narayanasamy told reporters in New Delhi on Friday.

He was reacting to questions on the three CAG reports -- on allocation of coal blocks, Delhi International Airport Limited and Ultra Mega Power Projects -- which rapped the government for favouring private firms.

Narayanasamy insisted that the CAG reports were incomplete as they were not yet examined by Parliament's Public Accounts Committee (PAC).

"They (CAG reports) have to be tested before Parliament. It comes before the PAC. The PAC is like a mini-parliament. It will consider the views of political party members. Then only it will become final. Therefore, draft report will not become final," he said.

Narayanasamy blamed the media for creating "confusion" in the country over the reports.

Holding Prime Minister Manmohan Singh "morally, politically and personally" responsible for the Rs 1.86 lakh crore loss estimated by CAG in coal block allocation, the BJP today demanded that he should quit his post.

"The facts leading to the delay are incontrovertible. The Prime Minister is morally, politically and personally responsible for this wrongful loss. He must seriously introspect on accepting the moral responsibility for this loss and quitting his office," Leader of Opposition in Rajya Sabha Arun Jaitley said.

The CAG report establishes that the concept of competitive bidding for coal blocks was first conceived on June 28, 2004, Leader of Opposition in Lok Sabha Sushma Swaraj said. It has been put into practice after notification only on February 2, 2012. To give effect to this policy itself, eight years have lapsed, she said.

The main Opposition held Dr Singh directly responsible for this delay as he held the Coal portfolio for five of these eight years.

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