One of the apex industry bodies Associated Chamber of Commerce and Industry (Assocham) seems to have provided some relief to the government while expressing deep concerns on CAG's report on alleged coal scam. Assocham said that the CAG reports on coal block allocation, Delhi airport and surplus coal sharing of R-Com are creating environment of distrust and suspicion.
THE INDUSTRY body claimed that the CAG’s conclusions over the 57 coal blocks allotment have been arrived at without taking all the facts into consideration.
“Only one of the 57 coal blocks has gone into production. Several of the blocks were allocated to power, steel and cement companies for captive use. If the blocks were auctioned, the cost of these blocks would have pushed up the sale price of power, steel and cement. These are the basic industries crucial to the entire economic value-chain,” opined Assocham.
However, the industry body agreed that there could have been serious flaws in the selection of beneficiaries while allocating coal blocks and the issue has to be tackled differently.
“But to extrapolate the current price to the prospective coal output from these blocks and then arriving at a figure of over Rs 1.87 lakh crore as the loss to the Government, does not seem to be correct application of accepted principles of economic value assessment,” said Rajkumar Dhoot, President, Assocham.
Assocham said that no investment would have come to Delhi airport if the market price for the extensive land required for the project were to be paid upfront. It added that Public utilities are not built on the principles that CAG has applied in this case anywhere in the world. The industry lobby group said that the selection of the partners for the airport project through a global tendering process was not a give-away.
The power generation companies which were given the coal blocks had also got the license on the basis of global bids. Licences were given to those willing to supply power at the lowest price among the bidders. It is quite clear that the power companies would not have been able to quote the price they did if they were to get coal in an auction determined price, says Assocham.
“While the CAG figure is notional, the message which “unfortunately” has gone around is that the Government has given huge benefits to the private corporations. At a time when government should encourage private sector investment and remove constraints to it, the CAG reports by of erroneous conclusion have made any liberal reform a political risk,” said Rajkumar Dhoot.
Dhoot said that if the government is to be mandated on what public policies should be, by the judiciary or the chief auditor or some civil groups, only chaos would follow.