More fury over Indian coal inefficiencies

INDIA’S national auditor says the government has lost $US37 billion in revenues due to a failure to competitively auction state coal licences.
More fury over Indian coal inefficiencies More fury over Indian coal inefficiencies More fury over Indian coal inefficiencies More fury over Indian coal inefficiencies More fury over Indian coal inefficiencies

Manmohan Singh courtesy of the World Economic Forum

Justin Niessner

The report reflects a reduction of the $210 billion loss estimated to have been squandered by the coal ministry in a leaked audit last March because government profits accrued through mining since the licence allocation had been taken into consideration.

The irregularities, called “scams” by the Hindustan Times, have put pressure on Prime Minister Manmohan Singh who was head of the coal ministry during the 2006-09 period when the severe losses occurred.

The resulting media storm has been dubbed “Coalgate”

“[H]e is politically, morally and directly liable,” opposition party leader Arun Jaitley said in the Hindustan Times.

“If he is directly liable, he has to introspect that he should own up responsibility and impose on himself the moral sanction of quitting his office.”

Bharatiya Janata party spokesperson Rajiv Pratap continued to harden the tone.

“This is not just a scam, it is a case of murder and loot,” he said in India’s Hill Post.

“We would like an answer from the prime minster.”

The auditor’s report said losses occurred because the process of bringing transparency to the award of government coal licences had been delayed.

“In the meantime, 194 net coal blocks with aggregate of 44,440 million tonnes were allocated to different government and private parties up to March 31, 2001,” it said.

“The government could have tapped part of this financial benefit by expediting decision on competitive bidding for allocation of coal blocks.”

In addition to lost revenues from private developers, the report found production losses were attributable to extended delays in the environmental permitting process of proposed minesites.

Time overruns of up to 10 years were noted for some coal blocks while even the most lengthy government timelines for underground mines specified that production should begin within 4.5 years.

The Indian government has ordered state miner Coal India to ramp up production as a plan to increase coal imports has still left the country’s power sector to deal with severe shortfalls.

Last month, a collapse of the electricity grid cut power on 600 million people in the northern and eastern regions for hours.

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