New Delhi:
The government, which is under fire on account of a report by its auditor for losses to the tune of 10.7 lakh crores for not auctioning coal deposits from 2004 - 2009, has managed to partly douse the flames. The Comptroller and Auditor General (CAG), which prepared the draft report, has said that the content has not been finalised and hence, is misleading. Here is your 10-point cheat sheet to this story:
1) Prime Minister Manmohan Singh has said that since the CAG has clarified its stand on the matter, there is no need for any explanation in Parliament. The Opposition had said that the Prime Minister, who supervised the Coal Ministry for some of the period in question, must explain the losses mentioned in the report.
2) The losses are part of a draft report by the Comptroller and Auditor General which was leaked to the media.
3) The draft report says 155 coal-fields were allocated to about 100 private and some state-run firms or public sector units in a manner that gave "undue benefits" to the companies. The report said the sale of the blocks was "subjective" and allowed "windfall gains", but does not make allegations of corruption or bribe-taking.
4) This afternoon, the CAG wrote to the Prime Minister's Office and said it was embarrassed by the leak. "The observations which are under discussion at a very preliminary stage...and hence are exceedingly misleading," the letter allegedly states.
5) Coal Minister Sriprakash Jaiswal says ads were placed to invite offers from interested firms, and that state governments led by the BJP and the Left, like in Rajasthan and West Bengal, had opposed a process of bidding. The government says that the allotment of coal fields was done in a transparent manner and that, not a single block was allotted without the consent of the state governments.
6) India is the world's third-largest coal producer in the world after China and the United States.
7) Analysts and experts say that an auction would raise power tariffs and that, not all coal blocks are profitable or commercially viable. They say CAG has erred in its calculation of losses.
8) State-run power company NTPC says it made no windfall profits from the allocations and that the lower costs meant cheaper electricity for consumers.
9) The Indian subsidiary of ArcelorMittal, and steel makers Tata and Jindal Steel and Power, are among the companies named in the report. Jindal's controlling shareholder, Naveen Jindal, who is also a member of parliament, defended the policy of direct allocations, saying it had allowed private companies to jump-start production at mines left idle by state-run Coal India Limited, the world's single largest producer.
10) Coal fields are currently allocated by a screening committee. Interested firms are given points for different parameters - whether land and environmental clearances are in place, for example. Parliament last year approved amendment to Mines and Minerals Regulation and Development Act of 1957 to enable the government to auction coal blocks.
(with inputs from Reuters)