Tata-led Investment Commission favoured auction of coal blocks

In the backdrop of draft CAG report estimating huge losses to exchequer in coal blocks allocation, Tata Sons today said the Investment Commission headed by Ratan Tata recommended bidding of the mines to prevent hoarding.

"The Commission's proposals categorically were for bidding, more productive usage of coal blocks and measures to prevent hoarding and to ensure competitive usage," Tata Sons said in a statement here.

The three-member Investment Commission set up by government also comprised noted banker Deepak S Parekh and industry leader Ashok S Ganguly.

The Commission which had worked between December 2004 and December 2009 had given 1,400 recommendations on increasing investment in infrastructure, manufacturing services and the knowledge economy.

According to Tata Sons statement, the Commission headed by its group chief had recommended that investment in coal mining should be enhanced through bidding of blocks and inducement of competition through 'use or lose' policy.

Even in the power sector, the Commission recommended establishment of 25-30 sites for mega projects for a total of 35,000 MW with an investment of over $30 billion through competitive bidding on tariffs.

It also suggested carving out specified viable mining blocks from Coal India (CIL) for captive exploitation.

Alternatively, CIL subsidiaries should be encouraged to induct strategic partners on production sharing basis.

The private sector participation was suggested on the model of bidding in the oil blocks.

The government's policy of allocating coal blocks without auction has come under severe criticism in and outside Parliament after a draft CAG report put the losses to exchequer on this count at Rs 10.67 lakh crore.