After taking the CAG head-on over alleged irregularities in the allocation of coal blocks, the Coal Ministry seems to have veered around to the view that wisdom lies in staying on the right side of the statutory auditor. So much so that along with the Prime Minister’s Office, the ministry has apprised the Comptroller and Auditor General well in advance about the guidelines it is preparing for introducing competitive bidding of coal blocks.
An August 23 note by the Coal Ministry says that apart from taking the coal-rich states on board over guidelines to auction blocks under the Competitive Bidding Rules 2012, “the terms and conditions were also shared with the PMO and CAG”. The ministry has also stated that it is moving towards “fine-tuning” and “tightening” the guidelines after having received the CAG’s concurrence.
The note acknowledges the CAG’s recommendation that “there is a need for strict regulatory and monitoring mechanism to ensure that the benefit of cheaper coal is passed on to the consumer”. Taking a cue from this, the ministry has decided that in case the coal is used for power generation, the generating company will have to participate in the bids for procurement of power by the distribution companies as per the bidding guidelines. “This will ensure that the benefit of coal from the said block is passed on to the consumers,” says the note.
Responding to another CAG recommendation that the government prepare terms for allocating coal blocks to state-run firms like power major NTPC Ltd, the ministry has identified a set of criteria including size of the state, assessment of the immediate needs, capability of the state-run mining corporations and their past track record in exploration. In this regard, it had pointed to Coal India Ltd’s monopoly status, “which has adversely affected its functioning, particularly when it comes to customer satisfaction”.
The ministry has constituted a six-member inter-ministerial committee to be headed by Coal Secretary Sanjay Kumar Srivastava to consider the applications and submit recommendations to the Centre. Other members include three joint secretaries of the Coal Ministry, the ministry’s advisor-projects and the Chairman of