30 Aug, 2012, 07.13AM IST, Himangshu Watts,ET Bureau
NEW DELHI: Undaunted by sustained criticism from the government, the Comptroller and Auditor General of India (CAG) is ready to make things even more difficult for the Congress-led administration by arguing that the value of blocks given away to private companies can be pegged 10 times higher than the controversial estimate of Rs 1.86 lakh crore (USD 33 billion).
The auditor is expected to cite the higher number to the Public Accounts Committee of Parliament if asked to respond to the barrage of attacks from the Prime minister and his Cabinet colleagues, sources in the CAG office said.
One source said the value of coal blocks given to private parties was estimated conservatively on the basis of the difference between the cost of production (including financing costs) and selling price of Coal India, which translates into a gain of Rs 295.41 per tonne.
"We have been supremely conservative in our calculation. If we had used the price of coal in e-auctions or the landed cost of imports to calculate the gains of private companies, the amount would have been dramatically higher," a CAG source said.
The auditor has already indicated this in a footnote in the report on ultra mega power projects, where it said the cost of coal from e-auctions amounted to Rs 1,782 per tonne on the basis of Coal India data for 2010-11. If this price is used to calculate the value of 6,282.5 million tonnes of coal given to private firms, it would amount to Rs 11.2 lakh crore.
The report also says based on state-run power utility NTPC's data for November 2009, the landed cost of imported coal is Rs 2,874 per tonne. This would translate to a staggering benefit of Rs 18.1 lakh crore.
CAG sources said they had enough ammunition to respond to attempts by the government to rubbish the audit report.
"One minister says that blocks were given free for the sake of economic growth and because Coal India was not producing enough coal. But another minister says the coal has not been mined, so there is no question of any loss. If coal has not been mined, then it defeats the logic of giving away coal on the grounds that CIL is not producing enough," one of the sources said.
"(Further) the asset has been transferred, even if it has not been mined. Is the government admitting that when the coal is mined, there will be a loss?" the source added.
CAG sources also disagreed with criticism that the auditor was delving deep into policy matters.