CAG is out of the bag
BY MPost18 Aug 2012 12:25 AM GMT
MPost18 Aug 2012 12:25 AM GMT
After facing severe criticism for delaying the tabling of the Comptroller and Auditor General (CAG) report from the budget session to the current monsoon session, the government finally allowed it to be placed in both the houses of Parliament. It invited instant attack from opposition benches. The three reports, namely on the power projects, allocation of coal blocks and functioning of the Delhi airport, calculate a huge cumulative loss of Rs 2,18,448 crore to the public exchequer.
The reports indicate that loss to exchequer from the allocation of coal blocks amounts to Rs 1.86 lakh crore; the benefits accruing to Anil Ambani-led Reliance Power is Rs 29,033 crore; and the favours shown to the GMR-controlled Delhi International Airport Limited (DIAL) caused losses up to Rs 3,415 crore. The DIAL report also points out that the airport company has the potential of commercial exploitation up to Rs 1,63,557 crore over a 60-year period from the land which is given to it on a lease of just Rs 100 per annum.
Though, of the three reports, the reported loss to the exchequer from the allocation of coal blocks is the biggest, but as far as the wrongful benefits to a single corporate house is concerned, Reliance Power is the biggest gainer, making Rs 29,033 crore from the favours shown by the government and vitiating the bidding process. At that time, the home minister Sushil Kumar Shinde held the power portfolio. The CAG has recommended that the allocation of Chhatrasal coal block to Reliance Power should be appropriately reviewed.
A similar recommendation had been made by the commerce ministry in the past, but its view was then overruled by the empowered group of ministers, headed by then finance minister Pranab Mukherjee. Coming down heavily on the post-bid concessions given to the Anil Ambani-led firm, the CAG said that undue benefit of Rs 29,033 crore accrued to Reliance Power when the government allowed use of surplus coal from blocks allotted to its Sasan power plant for its other projects. The report says that subsequent to award of the 4,000 MW Sasan ultra mega power project to Reliance Power, 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. This undue favour to the company was first reported by Millennium Post.
These reports have already created a political storm in the country. The CAG has said that 25 firms, including Essar Power, Hindalco, Tata Steel, Tata Power and Jindal Steel and Power have benefitted from coal blocks allocated to them without bidding. Prime Minister Manmohan Singh could face a pointed attack from the opposition benches during the rest of the session of Parliament on this count, as he looked after the coal ministry during the period in question.
Regarding the benefits accruing to GMR, the Nationalist Congress Party leader Praful Patel will have to defend himself from the barbs of his rivals. Though he currently does not hold the charge of the Ministry of Civil Aviation, the concessions to DIAL were allowed during his tenure. 'Allowing DIAL to levy Development Fee vitiated the sanctity of bidding process and led to undue benefit of Rs 3,415.35 crore to the private firm,' the report said and asked the government to investigate all cases of post bid concessions to GMR, which holds 54 per cent stakes in DIAL, and fix responsibility.
The government has the option of not discussing the matter on the floor of the house, as the procedure demands that the report be sent to the Public Accounts Committee (PAC) of Parliament, where the report is closely scrutinised. The committee consists of members of both the houses. The PAC report is tabled before the hosue, which can be taken up for discussion then.
The reports indicate that loss to exchequer from the allocation of coal blocks amounts to Rs 1.86 lakh crore; the benefits accruing to Anil Ambani-led Reliance Power is Rs 29,033 crore; and the favours shown to the GMR-controlled Delhi International Airport Limited (DIAL) caused losses up to Rs 3,415 crore. The DIAL report also points out that the airport company has the potential of commercial exploitation up to Rs 1,63,557 crore over a 60-year period from the land which is given to it on a lease of just Rs 100 per annum.
Though, of the three reports, the reported loss to the exchequer from the allocation of coal blocks is the biggest, but as far as the wrongful benefits to a single corporate house is concerned, Reliance Power is the biggest gainer, making Rs 29,033 crore from the favours shown by the government and vitiating the bidding process. At that time, the home minister Sushil Kumar Shinde held the power portfolio. The CAG has recommended that the allocation of Chhatrasal coal block to Reliance Power should be appropriately reviewed.
A similar recommendation had been made by the commerce ministry in the past, but its view was then overruled by the empowered group of ministers, headed by then finance minister Pranab Mukherjee. Coming down heavily on the post-bid concessions given to the Anil Ambani-led firm, the CAG said that undue benefit of Rs 29,033 crore accrued to Reliance Power when the government allowed use of surplus coal from blocks allotted to its Sasan power plant for its other projects. The report says that subsequent to award of the 4,000 MW Sasan ultra mega power project to Reliance Power, 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. This undue favour to the company was first reported by Millennium Post.
These reports have already created a political storm in the country. The CAG has said that 25 firms, including Essar Power, Hindalco, Tata Steel, Tata Power and Jindal Steel and Power have benefitted from coal blocks allocated to them without bidding. Prime Minister Manmohan Singh could face a pointed attack from the opposition benches during the rest of the session of Parliament on this count, as he looked after the coal ministry during the period in question.
Regarding the benefits accruing to GMR, the Nationalist Congress Party leader Praful Patel will have to defend himself from the barbs of his rivals. Though he currently does not hold the charge of the Ministry of Civil Aviation, the concessions to DIAL were allowed during his tenure. 'Allowing DIAL to levy Development Fee vitiated the sanctity of bidding process and led to undue benefit of Rs 3,415.35 crore to the private firm,' the report said and asked the government to investigate all cases of post bid concessions to GMR, which holds 54 per cent stakes in DIAL, and fix responsibility.
The government has the option of not discussing the matter on the floor of the house, as the procedure demands that the report be sent to the Public Accounts Committee (PAC) of Parliament, where the report is closely scrutinised. The committee consists of members of both the houses. The PAC report is tabled before the hosue, which can be taken up for discussion then.
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