Govt terms CAG's coal report 'flawed'

Govt terms CAG's coal report 'flawed'

Presumptive loss is faulty as mining is yet to start

Govt terms CAG's coal report 'flawed'

The government on Friday said the presumptive loss to national exchequer suggested by the CAG in its report on coal block allocation was flawed  since mining was yet to start at the blocks under scanner.

Auction of the new coal blocks may commence by the year-end, the government said.
“If coal is not mined, it remains buried in mother earth, where is the loss?” Finance Minister P Chidambaram questioned, addressing a joint press conference with Coal Minister Sri Prakash Jaiswal.

Chidambaram called the CAG report “completely flawed.” “A loss will only arise if coal were to be mined and sold at an unacceptable price or value,” he said, adding that production had started in only one of the 57 coal blocks highlighted in the CAG report.

In its report, the CAG had alleged that the irregularities in coal block allocation may result in potential revenue loss of around Rs 1.86 lakh crore to the national exchequer. Jaiswal said coal blocks for allocation have been identified but the process will begin only after finalising the bidding process.

Rating agency Crisil is preparing a methodology to determine the reserve price of blocks identified by the Coal Ministry for auction.

Jaiswal said bidding for coal blocks will be finalised in consultation with the states concerned. Several states including Chhattisgarh, Jharkhand, West Bengal and Odisha had opposed the bidding process on the ground that they would lose revenue on account of higher cost of coal.

“The states subsequently agreed to the bidding process after the government proposed to give the entire revenue from the bidding to the states,” said Jaiswal.

Volleying questions on the progress in appointing a regulator for the coal sector, Chidambaram, who is heading a ministerial committee to decide on the issue, said:
“The Group of Minister was in the process of identifying all those aspects which should remain with the coal regulator.

“The bill is being drafted, after one more meeting of the GoM, we will finalise it and send to the cabinet for approval.”