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CAG launches re-audit of 21 coal blocks in Madhya Pradesh

India's audit watchdog, the comptroller and auditor general of India (CAG), has launched a special audit of all 21 coal blocks in Madhya Pradesh allocated by the former Manmohan Singh-led UPA government. The CBI is already probing the allocation of captive coalfields between 1993 and 2010 as part of a court-monitored probe.

Ten blocks were allotted to the Madhya Pradesh State Mining Corporation (MPSMC) and the remaining to central and private power production companies between 2008 and 2013.

CAG's surprise audit was kick-started merely a month after its performance audit report of all coal blocks was tabled in the state assembly. No major irregularities were mentioned in the report.

CAG officials approached the MPSMC, which initially resisted re-audit. They argued the last performance audit was conducted six months ago and the report was submitted in the budget session. However, auditors displayed a letter from its Delhi headquarters, ordering the first-ever 'special' audit. This comes two years after CAG's explosive report in Parliament pegged estimated losses to exchequer of Rs 1.84 lakh crore from coal allocations to private firms.

CAG has been conducting annual transaction audit and performance audit every five years. "This is the first time a re-audit of coal blocks allocation is being done under the guise of special audit," said a top bureaucrat.

An officer at the state mining ministry said: "They are probing captive coal block allocations for power production to independent power producers (IPPs). The State Mining Corporation is not an IPP. We have told them."

MPSMC secretary Ajatshatru Srivastava confirmed CAG's special audit in the state. "There's no problem at all," Srivastava. "After all it's between two government bodies. We'll cooperate and in case if flaws are detected, we'll rectify them."

Most coal blocks in MP are awaiting phase II clearance from the Union environment ministry although allotments were made five to six years ago.

The Mahan coal block in Singrauli district — which has been allotted to Mahan Coal limited, a joint venture of Hindalco (Aditya Birla Group) and Essar Power — has already faced protests from green activists. Coal from this block will fuel two captive power plants being set up by Essar (2x600 MW worth Rs 4,000 crore) and Hindalco (900 MW worth Rs 2,400 crore). Chief minister Shivraj Singh Chouhan was accused of lobbying with the Centre to overrule environmental objections against mining at Mahan, which is one of the blocks at stake in the coal scam.

JP Associates has already begun mining on 728.75 hectares of forest land at Amelia (north) coal block. Coal from this block will feed the 660x2 megawatt power plant being developed by group company, JP Power, in Singrauli district. The block was awarded to the MPSMC in 2006.

Factsheet:

* Madhya Pradesh has coal reserves of 16,027.07 million tonnes spread across Singrauli, Sidhi, Shahdol, Umaria, Betul, Chhindwara, Mandla and Narsinghpur districts.
* NCL (Northern Coalfields Ltd) is working in Sidhi district, WCL (Western Coalfields Ltd) in Chhindwara and Betul districts, and SECL (South Eastern Coalfields Ltd) at Shahdol and Umaria districts.
* NCL, WCL and SECL are all subsidiaries of Coal India Lted. Gotitoriya coal block of Narsinghpur district has been leased out to M/S BLA Industries for captive power generation.
* The country's thickest coal seam is at NCL's Singrauli coalfield at Jhingurda.

Source: The Times of India