The Hindu Business Line : CAG adopting double standards, says Shourie

FORMER Union Minister for Disinvestment Mr Arun Shourie has questioned the "standards" adopted by the Comptroller and Auditor-General while passing strictures.

In an interview to The Hindu group of publications on Tuesday, Mr Shourie pointed out that the CAG passed no strictures while commenting on the disinvestments distribution circles of the Delhi Vidyut Board, although there were major discrepancies between the figures of the size of assets provided by the consultant to the disinvestments and those made available by the Board.

Mr Shourie, who has been criticised by the CAG for underselling the Juhu Centaur hotel in Mumbai, (previously owned by Hotel Corporation of India, a subsidiary of Air India), said that just as in the case of Juhu Centaur, the Delhi Vidyut Board disinvestment also saw single bidders in each of the three distribution circles — the Reliance group in two and the Tatas in one.

"First the bids were rejected, but later they did the unthinkable thing of entering into private negotiations with the single bidders.

"As a result, they gave further concessions, probably worth about Rs 900 crore," Mr Shourie said.

He said that even according to the CAG report, the balance sheets given by the consultant for the bids and the actual balance sheet had a discrepancy of Rs 3,165 crore.

Quoting from the report, Mr Shourie said, "In response to an audit query as to the basis of the valuation of the assets, the Government stated that the details of the calculations were available only with the consultants in their computer modelling, which were not available with the Government.

"It was added that the consultants did not normally disclose their computer modelling as they regarded it as their business secret. However, the Government furnished a note on the methodology adopted in asset valuation.

"The scrutiny of the note indicated that while the general methodology had been explained, the basic figures adopted the weightages given and the assumptions made were not indicated and, hence, the basis of arriving at the final figure of Rs 3,165 crore could not be verified.

"The Government had evidently relied only on the report of the consultant."

Noting this was "an example of the standards adopted by the CAG," Mr Shourie wondered as to why in this case no strictures were passed.

"He (the CAG) appears to be quite satisfied with the explanation," he said.

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