CAG defends Rs 1.85 L-cr figure in coal report

Had to mention the financial gain to private firms

Comptroller and Auditor General (CAG) Vinod Rai on Friday defended the Rs 1.85 lakh crore figure in the auditor’s report on coal block allocations, saying the organisation would have failed in its duty by not mentioning the financial gain to private firms.

In a presentation before Parliament’s Public Accounts Committee (PAC) on CAG’s report on coal blocks, Rai also said the auditor neither advocated any particular policy nor commented on it.

During the presentation, most Congress members in the Committee blamed the report for a part of the financial problems alleging that the rupee devalued and FDI flows reduced after it was tabled in Parliament, sources said.

They also asked the CAG as to why the report covered the period between 2004 and 2009 and not 1993 onwards. During his detailed presentation, Rai also explained the methodology used by the auditor in arriving at the figure and scoffed at suggestions that terms including “windfall gains” were the auditor’s creations. He said the term was used by the Coal Ministry.

He said the calculation of gains in the final report was made on the basis of extractable quantity of coal from open cast mines only since the Ministry argued that underground mining was not as profitable.

He also said the auditor relied on the “reliable” figures made available by Coal India Ltd and did not go into the calculations of private mine owners.

At one point of time, Rai told the Committee that “we would not have done our duty if we had not mentioned the likely financial gain... We indicated the magnitude of the loss,” sources quoting the CAG said.

Replying to questions on why the CAG chose to audit the period between 2004 and 2009, Rai said the year was a “watershed” period as several companies had bid for captive coal blocks for thermal power plants due to government's “power for al”' programme.

He said the CAG also looked into the functioning of screening committees and gave examples that while between 1993 and 2003, the committee met 22 times and allocated 41 blocks, it met 14 times between 2004 and 2008 and allocated 175 blocks.