Sep 06, 2012, 04.21 PM | Source: CNBC-TV18

CAG's claim of coal loss looks exaggerated: JJ Irani

JJ Irani, member, TL Sankar Committee says CAG's claim of Rs 1.86 lakh crore loss looks exaggerated.

The Comptroller and Auditor General (CAG) report pointed to a notional loss of Rs 1.86 lakh crore to the exchequer in allocation and usage of coal blocks.

The CAG starts its coal audit report by referring to the recommendations of the TL Sankar Committee on roadmap for coal sector reforms set up in 2005.

The CAG says that while the report had recommended increasing the coal drilling capacity to 15 lakh metres per annum, the current capacity is only 3.4 lakh metres per annum.

In an interview to CNBC-TV18, JJ Irani, member, TL Sankar Committee says CAG's claim of Rs 1.86 lakh crore loss looks exaggerated. 

Also read: IMG begins 3-day review of 76 coal blocks today

Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Ekta Batra.

Q: What went wrong from 2005 to 2012 in the coal sector? What is your comment on this 1.86 lakh crore number that the CAG has thrown up by way of an opportunity loss, a notional loss for the country? Is it really a correct figure or atleast a ballpark figure?

A: I am not a privy to their calculations. But to say that so much coal is available and its value is so much and therefore multiply by the per tonne basis, I think it is a very incorrect type of calculation. I must prefix my comment by saying that I am not privy to the way they have calculated. But I think this is a rather exaggerated figure.

Q: The CAG keeps speaking of normative time for coal development. I think they take it as 42 months and the international average is about four years. So, 42 months would be three-and-a-half year. Is that adequate in India for all coal mine development or do you think that in most of the cases things might get much longer?

A: To develop a coal mine it takes much longer than to put up a steel plant from the initial stages onwards. Unfortunately, in India, most of the coal is located in under forest land. The environment ministry and the coal ministry are always at loggerheads about how quickly the sanctions can be given.

You referred to the Shankar Committee. Seven years ago, we had come to the conclusion that we have tremendous resources of coal, but we are very short on planning. The only producer of coal was Coal India. They had a very, shall we say, ‘dog in the manger’ attitude. They would not let go off any of the coal blocks or did not want to. So, the Shankar Committee took the view that let them ask for whatever they want for development for 25-30 years.

Even after that, a large amount of coal blocks were leftover. These should be distributed to more efficient public sector and private sector players to develop coal. Unfortunately, that has not happened.

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