Chhattisgarh suffered Rs.1,500 crore loss on coal deal: CAG

Raipur: Changes in the tender clauses led to Adani Group gaining and the Chhattisgarh government losing Rs.1,549 crore in a coal mining deal, said Comptroller and Auditor General (CAG) in a report on Friday.

The CAG report for the year ended March 31, 2012, was tabled in the state assembly, the last day of the 32-day budget session.

Main opposition Congress slammed the ruling BJP for massive lapses indicated by the CAG and claimed the government deliberately tabled the report on the concluding day of the session to avoid a discussion.

According to the report, state-run Chhattisgarh State Power Generation Company (CSPGC) was allotted Parsa coal block in Sarguja district. The company invited tenders for developing, mining and transporting coal to feed its power plant in Madwaa, about 200 km from the mines.

The Adani Enterprise Limited (AEL) qualified the bid and formed a joint venture company (JVC) with CSPGC. The block in the forested Hasdeo-Arand coalfields has an estimated reserve of 150 million tonnes.

The CAG report said the geological report suggested that the block had D and E grade of coal that was superior in quality.

However, CSPGC tender put grade F as the base and invited rates from companies on its basis in which AEL qualified.

During the pre-bid conference, AEL raised a query regarding the applicable basic price of coal and enquired what the contract would be if the quality of coal was better than F grade.

The CSPGC assured that the discount would be applicable on price of actual grade of coal instead of F grade coal.

Since the coal in Parsa was of D and E grades, the clauses in the tender were changed and the AEL-led JVC was given higher price for mining and transporting. The price of D and E grade are much higher than E grade.

"Since the JVC has to only mine and transport coal, there is no reason that grade shall be the parameter for the rate," Accountant General (Audit) for Chhattisgarh Purna Chandra Majhi told reporters while referring to the report.

The report said that "by changing the pricing clause in the tender, the company had extended undue benefit to the JVC. Because of the unwarranted amendment, the company is likely to lose Rs.1,549.04 crore during the entire period".