Chhattisgarh coal block allocation faulty: CAG | india | Hindustan Times
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Chhattisgarh coal block allocation faulty: CAG

Irregularities in the allocation of a coal block in Chhattisgarh's Sarguja district has led to the loss of Rs 1,052 crore to the state, a recent report by the Comptroller and Auditor General (CAG) has pointed out.

india Updated: Apr 09, 2012 23:32 IST
Ejaz Kaiser

Irregularities in the allocation of a coal block in Chhattisgarh's Sarguja district has led to the loss of Rs 1,052 crore to the state, a recent report by the Comptroller and Auditor General (CAG) has pointed out.


The opposition Congress has demanded a CBI inquiry into the matter.

The single bid accepted for the block at Bhatgaon II (extension) was from Nagpur-based SMS Infrastructure Ltd, a firm owned by Ajay Sancheti, the new BJP Rajya Sabha member.

In July 2007, the Centre had allotted two blocks —Bhatgaon II and Bhatgaon II extension — to the Chhattisgarh Mineral Development Corporation Limited (CMDC) for commercial mining. In 2008, the CMDC accepted bids for the blocks.

But the price accepted for Bhatgaon II (extension) — Rs 129 per metric tonne of coal excavated/sold — was vastly low. The accepted price for Bhatgaon II, which had similar quality coal, was Rs 552 per metric tonne.

"The two blocks were contiguous and the quality of coal was similar," said the CAG report, which was tabled in the assembly on April 4. "But despite being aware of the facts, the lower rate quoted by the single bidder in respect of Bhatgaon II (extension) was accepted."

Bhatgaon II was also allocated to SMS Infrastructure, albeit at the higher price. However, in this case, two organisations were declared eligible for the block.

Sancheti, also the joint MD of SMS Infrastructure, said, "The allegations are baseless. My company will issue a clarification."

CMDC chairman and senior BJP member Gauri Shanker Agrawal said the revenue loss cited was "hypothetical", since the assessment of loss or profit can only be calculated once the work begins.

Earlier too, the names of the Sancheti brothers — Ajay and Anand — had hit the headlines. Ajay's name had figured in the Adarsh Housing scam.

In July 2007, the state commercial tax department had imposed a penalty of Rs 17 crore on the company, but had waived the amount later.

"This is a political stunt by the Congress," said BJP spokesperson Shivratan Sharma. "The report is yet to go to the Public Accounts Committee, whose decision will be significant."