CAG Report may suggest Carrot & Stick for Caol Miners

REPORT COMING THIS WEEK

CAG Wants Carrot & Stick for Coal Miners

May recommend creation of single-window mechanism for approving mining projects

The Comptroller and Auditor General (CAG) is likely to ask the government to introduce rewards and penalties to encourage higher output by coal miners, including private firms that allegedly received a windfall of . 1.86 lakh crore from non-transparent allocation of coal blocks.

The CAG’s report on the coal sector, likely to be tabled in Parliament this week, is expected to broadly retain the contents of the leaked draft report, although it is likely to scale down the estimated loss to the government by giving away coal blocks free.

Sources said the auditor may recommend creation of singlewindow mechanism, similar to the Foreign Investment Promotion Board (FIPB), for approving projects to speed up clearances from various sections of the central and state governments.

A senior government official said that during discussions prior to finalisation of the report, it emerged that the CAG wanted the government to reward good performance by captive blocks and disnicentivise non-performers. Of the 86 captive blocks that were to produce 73 million tonnes of coal during 2010-11, only 28 blocks including 15 owned by private sector began operations to produce 34.64 million tonnes by March 2011.

CAG may also pull up the coal ministry for not monitoring progress of mines periodically and its Kolkata-based department, Coal Controller’s Organisation, for not conducting any field inspections. An official said the CAG may retain the points made in the draft report about the coal ministry’s non-transparent allocation of coal blocks through a screening committee, and the delay in auctioning mines, which was first suggested in 2004.

The government has allocated 194 coal blocks with aggregate geological reserves of 44,440 million tonnes to government and private companies till March 2011. Several questions have been raised about the procedure followed for allocation to captive consumers that were made merely on the basis of recommendation from ministries and state governments.

Source: Economic Times