Opposition demands PM’s resignation, Govt rejects reports

The scam-battered UPA Government was once again put on the mat by the Comptroller and Auditor General. Going by the accounting watchdog’s reports on coal block allocation, Ultra Mega Power Projects through the Special Purpose Vehicle route, and implementation of public-private partnership in IGI Airport undue benefits to private players could add up to Rs 3 lakh crore.

While the Opposition smelt blood, and the BJP demanded the resignation of Prime Minister Manmohan Singh, the Government rubbished the reports. The Minister of State in PMO, V. Narayanasamy, said the auditor has not followed the ‘Constitutional mandate’.

The Opposition demanded the resignation of the Prime Minister as he was holding charge of the Coal Ministry during five of the eight years that were audited by the CAG.

Terming it as “bigger than the 2G scam,” Opposition leaders made it clear that this time they would be more upfront. “The Prime Minister is morally, politically and personally responsible for this wrongful loss. He must seriously introspect on accepting the moral responsibility for this loss and quitting his office,” Arun Jaitley, Leader of the Opposition in the Rajya Sabha, said.

His Lok Sabha counterpart Sushma Swaraj added that the issue will be raised in both Houses of Parliament. Both the Houses are likely to be disrupted next week on the reports.


Though the final report on coal block allocation was a toned down compared to its draft, the CAG said that the delay in introduction of competitive bidding for allocation of coal blocks has “led to financial gains to the tune of Rs 1.86-lakh crore to 57 mine owners.”

Coal Minister Sriprakash Jaiswal termed CAG observations as ‘notional’. The Government implemented the best policy at that time and competitive bidding could not be introduced as there were conflicting opinions from the Law Ministry and States in 2006, Jaiswal said.

Reliance power-ed

The CAG report on Ultra Mega Power Projects (UMPP) under Special Purpose Vehicles for the year-ended March 31, 2012 found that allowing use of excess coal by Reliance Power from the three blocks allocated to Sasan UMPP after its award, not only vitiated the bidding process but also resulted in undue benefit to Reliance Power.

“Audit has estimated the financial benefit that will accrue to the project developer on the basis of comparison of tariff of Sasan project (Rs 1.196/unit) with that of Chitrangi (Rs 2.450/unit for Madhya Pradesh and Rs 3.702/unit for Uttar Pradesh). The overall financial benefit to Reliance Power due to impact of difference in tariff works out Rs 29,033 crore with a net present value of Rs 11,852 crore,” the report says.

Countering the CAG findings, the Power Ministry held that the contentious issue of surplus coal has been dealt in detail by the Empowered Group of Ministers (eGoM) after seeking legal views from the Attorney-General of India. So, the eGoM decision of April 24, which says the permission given for the use of surplus coal of Sasan coal blocks to Chitrangi project need not be withdrawn, stands.

DIAL gains

On Delhi International Airport Ltd (DIAL), the CAG said that with equity contribution of Rs 2,450 crore, of which the private consortium’s share was Rs 1,813 crore, DIAL got a brown-field airport for sixty years. The report adds that commercial rights of land valued at Rs 24,000 crore with a potential earning capacity, according to its own estimates, of Rs 1,63,557 crore.

Commenting on CAG, DIAL said that it has not received any undue benefits from the Government before, during or after the bidding process. The entire process of the privatisation and selection of joint venture was based on a transparent, international, competitive bidding which was guided and presided over by competent bodies and has been upheld as such by the Supreme Court in 2006.


(This article was published on August 17, 2012)
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