The Comptroller and Auditor General (CAG) has exposed alleged large scale irregularities by Chhattisgarh Mineral Development Corporation Limited (CMDCL) in awarding contract for commercial mining of a coal block in the state, leading to an anticipated loss of `1,052.20 crores revenue to state exchequer.
The CAG report, which was tabled in the state Assembly on Tuesday by chief minister Raman Singh, pointed out that the state government had accepted “abnormally low rate” from a lone bidder, which participated in the bidding for mining of Bhatgaon II Extension Coal Block in July 2008 in violation of tender rules.
The CAG said the coal block contained superior grade A to C of coal which is scarce and highly priced.
Even the company, while seeking environmental clearance in July 2009 had claimed that about 57 per cent of the coal reserve is of superior quality. Further, about 90-95 per cent of this can be extracted through open cast mining, which is less expensive.
“Though CMDCL — which was allotted the coal block by the Central government in July 2007 — was aware of all facts and quality of coal reserve, it accepted the lower rate quoted by the single bidder. Thus the evaluation and the acceptance of the rate offered by the bidder in respect of Bhatgaon II Extension Block was not in order,” the CAG report said.
“Before floating the tender for selection of bidder, the company failed to fix the minimum reserve price based on the quality of coal available in the mine,” the report observed.
The report further said that the company should have either extended the tender opening date or re-invited the tenders in respect of the coal block to generate fair competition instead of justifying the low rate quoted by the lone bidder which resulted in potential loss of revenue of `1052.20 crores over the lease period of 32 years.