CAG tremors set to rock Parliament

The government’s crisis managers are unlikely to be in a holiday mood on Independence Day, with three controversial reports of the Comptroller and Auditor General (CAG) set to be tabled in Parliament this week.

The tabling was expected on Thursday but this might be postponed as the two Houses might be adjourned on that day as a mark of respect to Union minister Vilasrao Deshmukh, who passed away on Tuesday.

The reports pertain to implementation of public private partnership projects at Delhi International Airport Ltd (DIAL), the power ministry’s Ultra Mega Power Projects (UMPPs) and allocation of coal blocks.

CAG FINDINGS

• On DIAL, the CAG is learnt to have said the potential earning from the land in question amounted to Rs 163,557 cr. This land, almost 4,800 acres, is alleged to have been leased to DIAL by Airports Authority of India at an annual lease rent of just Rs 100 for 58 years  
• IA leaked draft of CAG report on coal blocks’ allocation had accused the government of extending "undue benefits" amounting to Rs 10.6 lakh cr to a host of private companies through allotment of 155 blocks between 2004 and 2009. The final report has scaled down the figure to Rs 1.86 lakh cr 
• CAG has censured the government for setting a ceiling of three UMPPs for a bidder, saying “the proper parameter to assess capacity of the developer to execute the project on time” was not followed. The Anil Ambani-controlled RPower has three UMPP projects under its umbrella

In its report on DIAL, the CAG is learnt to have said that the potential earning from the land in question amounted to Rs 163,557 crore. This land — almost 4,800 acres — is alleged to have been leased to DIAL by the Airports Authority of India at an annual lease rent of just Rs 100 for 58 years.

The report on coal blocks’ allocation is potentially the most explosive. While a leaked draft had accused the government of extending "undue benefits" totalling Rs 10.6 lakh crore to a host of private companies through allotment of 155 blocks between 2004 and 2009, the final report has scaled down the figure to Rs 1.86 lakh crore. The earlier report had named the Tata Group, the Naveen Jindal group, Essar group, Abhijeet group, Laxmi Mittal's Arcelor and Vedanta among the beneficiaries.

The coal ministry had last year cancelled 24 allocations for delays in development and is currently issuing showcause notices to 58 companies ,threatening cancellation of allotments. Of 86 blocks with target production of 73 million tonnes (mt) scheduled to produce in the Plan period in question, only 28 had begun doing so and produced only 36.4 mt during 2010-11. “A shortfall of 52 per cent in production target reflects that the objective of enhancing production through captive blocks largely remained unachieved,” the leaked CAG draft report had said. The report, posted on a newspaper website, was subsequently removed.

The government’s auditor also looked into the government’s policy on UMPPs. According to the draft report, CAG reportedly censured the government for setting a ceiling of three UMPPs for a bidder, saying “the proper parameter to assess capacity of the developer to execute the project on time” was not followed. The Anil Ambani-controlled RPower has three UMPP projects under its umbrella.

The draft report on coal allocation had alleged undue benefits of Rs 15,849 crore extended by the government to Reliance Power Ltd (RPL) by way of surplus allocation for two of its UMPPs. The report had pegged benefit to RPL from surplus allocation for the Sasan UMPP at Rs 4,875 crore and another Rs 10,974 crore “may accrue” from the Tilaiya UMPP, it had said.