"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.
The CAG said it has arrived at the estimates based on the average cost of production and average sale price of opencast mines of Coal India in the year 2010-11.
"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".
The concept of allocation of captive coal blocks through competitive bidding was announced in 2004. However, government is yet to finalise the modus operandi of competitive bidding.
The lack of transparency in the allocation of coal blocks to private players resulted in a loss of a whopping Rs.1.85 lakh crore ($37 billion) to the exchequer as on March 11 last year, India's official auditor has said in a report.
"In the meantime, 194 net coal blocks, aggregate 44,440 million tonnes were allocated to different government and private parties up to March 31, 2011," said the much-awaited report.
"The government could have tapped part of this financial benefit by expediting decision on competitive biding for allocation of coal blocks," the report added, while observing that most allocations were made on the basis of recommendations from state governments.
The auditor report also recommended immediate steps to allot mines through competitive bidding process in a bid to bring about objectivity and transparency in the process and in the larger context of power for all this year.
Source - Hindustan times