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Leaked audit ruffles Indian coal industry

THE Confederation of Indian Industry called for the need to introduce competitive bidding for allocation of coal blocks to ensure viable and sustainable development of the country’s power sector.

Justin Niessner
Leaked audit ruffles Indian coal industry

The recommendation was issued in the wake of a leaked government audit which found Coal India responsible for unduly benefiting materials and utility companies more than $US200 billion by allocating coal blocks without auction.

The CII said allocating coal blocks without auction led to tardy site development, citing that of the 213 captive coal blocks allocated since 1993, only 28 had commenced production.

The statement prepared by CII director general Chandrajit Banerjee said competitive bidding would not only augment the future coal supply but would also ensure that only serious players bid for the development of coal blocks.

Though the government audit detailing Coal India’s loss underlines the call for coal block auctioning, the raw data of the draft report may require more time for proper analysis.

In a letter to Prime Minister Manmohan Singh, published in part on the PM’s website, the chief auditor of the report said the observations were very preliminary and hence “exceedingly misleading”

The auditor also clarified that the unintended benefits gained by companies receiving coal blocks did not necessarily represent losses to Coal India.

National Thermal Power Corporation reinforced this sentiment in The Hindu which reported yesterday that the state-run power company refused the claim that it had reaped a windfall from allocated coal mines as described in the auditor’s report.

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