CAG pulls up Chhattisgarh govt for coal block allocation

The Comptroller and Auditor General (CAG), in its audit report (Civil & Commercial) for 2010-11, had in April pulled up Chhattisgarh Mineral Development Corp Ltd for accepting a single bid for commercial mining of coal from a block allocated by the Centre.

The CAG said that the Centre in July 2007 allocated the Shankarpur coal block comprising Bhatgaon-II and Bhatgaon-II Extension to the Chhattisgarh Mineral Development Corp Ltd.

The company invited bids for commercial mining. It got the highest offer of Rs 552 for mining of per ton of coal from Bhatgaon-II and a single bid of Rs 129.60 per ton for Bhatgaon-II Extension.

"Though the rate obtained for Bhatgaon-II Extension block was abnormally low, the company accepted" them, CAG said adding both the coal blocks were contiguous and the quality of coal available in both of them was similar.

Bhatgaon-II Extension Block contained superior grade coal which is "scarce and highly priced".

"Though the company was aware of all these facts, it accepted the lower rates quoted by the single bidder," it said adding "the evaluation and acceptance of the rate offered in Bhatgaon-II Extension was not in order".

The CAG felt the company should have either extended the tender opening date or re-invited tender to "generate fair competition instead of justifying the low rate quoted by the lone bidder".

"This resulted in potential loss of revenue of Rs 1,052.20 crore," the CAG said. MORE