MGNREGA inefficiently managed, finds CAG


Issue Date: 

2013-4-23

Government spent Rs. 1,26,961 crore but hardly 30 per cent works are completed

Exactly five years after the employment guarantee programme’s pan-India roll out, the programme seems to have lost favour with the rural poor. The Comptroller and Auditor General (CAG) office submitted its latest audit report on the programme to Parliament on April 23. The audit shows around 20 per cent decline in employment generation under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in the last two years.

The rural employment programme guarantees 100 days of manual work if a rural household demands it. Government first implemented the programme in 200 districts in 2006. On April 1, 2008, it was extended to all rural districts in the country. This is the second such audit by CAG. The recent audit covered implementation during 2007-12 in 182 districts.

The latest audit report brings out the usual concerns associated with the programme: forgery in job cards, late payment of wages, declining job demand and non-completion of works.

Going by the extracts of the report tabled in Parliament, CAG found that lack of close monitoring of the programme has led to widespread irregularities. Many states have not been able to spend the allocated funds under the programme. Interestingly, states like Uttar Pradesh and Bihar having large rural population have spent the least.

Under MGNREGA, around 13 million works were taken up at an expense of Rs 1,26,961 crore, most of them related to water and soil conservation, useful to small and marginal farmers. But, the CAG report finds, only 30 per cent of these works have been completed.

Cover Story Related Articles:

Source URL: http://www.downtoearth.org.in/content/mgnrega-inefficiently-managed-finds-cag

 

CAG reports increase of 41 per cent in the market borrowing in 2011-12 , Gujarat #Narendramodi


 

Modi’s Pals

CAG report indicts the Gujarat government for showering undue favours to corporate groups leading to massive losses
Himanshu Upadhaya Bengaluru

While Narendra Modi’s apologists will selectively quote from the latest CAG audit report on state finances that revenue earning has registered an upswing, they will compulsively forget that “the fiscal deficit of Rs 11,027 crore in 2011-12 was met out from a net borrowing of Rs 15,083 crore”. The CAG has remarked that “an increase of 41 per cent in the market borrowing in 2011-12 over previous year for financing the deficit would lead to increased interest burden for coming years”.

Reporting its findings from the Performance Review of Management of Government Land, CAG has severely indicted the Gujarat government for extending favours to corporate groups such as Larsen and Toubro (L&T), Adani, Reliance Industries Limited (RIL) and Essar. The auditors asked for the files relating to 1,262 cases of allotment and regularization of encroachment approved by the government during 2006-07 to 2010-11. However, they were given access to only 594 case files.

According to CAG report for the year ended March 31, 2012, Gujarat State Petronet Limited (GSPL) was responsible for deviation from the agreed terms of recovery of transportation charges for transportation of gas from the specified entry point of the company’s pipeline network; this led to passing of undue benefit of Rs 52.27 crore to RIL.

In April, 2012, CAG auditors sought the reasons for non-production; there was deliberate evasion. The audit mentions that a file on a company called ‘GIFT’ was not produced.CAG has highlighted breach of allotment conditions by the Mundra Port and SEZ Ltd stating that only 98.66 lakh sq m out of 5.47 crore sq m were used by the company till December 2011, while land was allotted from 2005 to 2007. CAG reminded the land revenue department that the collector is empowered to either levy penalty or take back the possession of the land. There was no response. Is this because a corporate entity is too close to Modi?

The performance audit highlights the allotment of 8,53,247 sq m land at Hazira to L&T  for setting up facilities for manufacture of Super Critical Steam Generators and Forging Shop for a Nuclear Power Plant. While the District Land Valuation Committee (DLVC) had recommended the rate as Rs 1,000/1,050 per sq m, the State Land Valuation Committee (SLVC) had recommended Rs 2,020 per sq m in September 2007.

The cabinet in February 2008 granted a special concession of 30 per cent on the value of land fixed by DLVC and allotted the land at Rs 700/735 per sq m. L&T applied for 12.14 lakh sq m for expansion of the project in August 2009 even as DLVC fixed the rate for land at Rs 2,800/2,500/2,400 per sq m. As per the laid down process, the revenue department should have gone for SLVC fixing the rate, but in consultation with principal secretary, finance department and chief secretary, it proposed to apply the same concessional rate of Rs 700 per sq m and the cabinet allotted 5,79,577 sq m of land.

Not only did this resulted in the loss of revenue worth Rs 128.71 crore to state exchequer, this also set in a ripple effect where corporates that have been sitting on encroached government land in the vicinity at Hazira came forward to get the occupancy regularized at ‘concessional’ rates. By applying similar rates to Essar Steel, the department inflicted a loss of Rs 238.50 crore and extended undue benefit to Essar.

CAG’s audit points out how K Raheja Corporation Pvt Ltd was allotted grazing land for the construction of an IT park in Gandhinagar district and was allotted 3,67,581 sq m of land at the rate of Rs 470 per sq m, which resulted in short recovery of Rs 9.96 crore. CAG has argued that it should been levied Rs 705 per sq m in this case.

While they allotted 30,54,915 sq m of land to Essar Power Gujarat Ltd in the vicinity of a highway in Jamnagar for a power project, they levied Rs 80 per sq m instead of Rs 107 per sq m. The department accepted the mistake in a correspondence in June 2012; it added 30 per cent for highway approach, but sought to gave the corporate group a concession by allowing a 30 per cent deduction by stating that the land was of smaller area!

The audit report on Public Sector Undertakings (PSUs) states, “A review of last three years’ audit reports of the CAG shows that in the state, PSUs’ losses of Rs 4,052.37 crore and infructuous investment of Rs 166.77 crore were controllable with better management. There is a need for greater professionalism and accountability in the functioning of PSUs… The above losses pointed out are based on test checked audits of PSUs, and the actual controllable losses could be even higher.”

From the print issue of Hardnews :

APRIL 2013

 

Gujarat PSUs gave undue benefits to business houses: CAG


 

The CAG detailed undue favours to Reliance Industries Ltd, Essar Steel and Adani Power Ltd. It also highlighted that the state government has tweaked rules to grant land to Ford India Pvt Ltd as well as Larson and Toubro Ltd
CAG Vinod Rai

Gandhinagar, Apr 2 (PTI): The Comptroller and Auditor General (CAG) has said that government-owned firms in Gujarat granted “undue benefit” to big industrial houses, which resulted in revenue losses worth crores of rupees to the state exchequer.

The CAG report, for the year ended March 31, 2012, was tabled on Tuesday in the Gujarat State Assembly. The CAG detailed undue favours to Reliance Industries Ltd (RIL), Essar Steel and Adani Power Ltd (APL). It also highlighted that the state government has tweaked rules to grant land to Ford India Pvt Ltd as well as Larson and Toubro Ltd.

“Gujarat State Petronet Ltd (GSPL) was responsible for deviating from the agreed terms of recovery of gas transportation charges from the specified entry point of the company’s pipeline network and this led to passing of undue benefit of Rs 52.27 crore to RIL,” the CAG report said.

CAG was of the view that GSPL has failed to safeguard its own interest, leading to passing on undue benefit of Rs 52.27 crore to RIL. GSPL had entered into a gas transportation agreement (GTA) with RIL transport D6 gas from Bhadbhut in Bharuch district to RIL’s refinery in Jamnagar in March, 2007.

However, when RIL began transporting gas from its KG-D6 field to its refinery, GSPL did not invoke GTA terms and instead charged RIL a single rate on the quantity transported, thereby passing of undue benefit of Rs 52.27 crore to RIL.

Similarly, it has also highlighted that Gujarat Urja Vikas Nigam Ltd (GUVNL) was involved in non-adherence to terms of the power purchase agreement (PPA), which led to short recovery of penalty of Rs 160.26 crore and passing of undue benefit to Adani Power Ltd (APL).

On the other hand, the CAG report observed that GUVNL recovered a penalty of only Rs 79.82 crore from APL for its failure to supply power and also for the short supply of power against GUVNL’s entitlement in the power generated by APL during August 2009 to January 2012.

CAG also took strong exceptions to the Gujarat government regularising alleged encroachment of 7,24,897 sq mts of land by Essar Steel Company Ltd (ESCL) at Hazira in Surat, at the same price as government alloted land to L&T near ESCL, which resulted in short recovery of ad hoc occupancy price to the extent of Rs 238.50 crore.

“Government land measuring 7,24,897 square metres was encroached by ESCL in Hazira, Surat district. On request of the company, the government decided in July 2009, to regularise the encroachment by levy of 2.5 times of ad hoc value of land at Rs 700 per square metre, on the ground that, the land in a nearby area was given to L&T,” the CAG report said.

“We noticed that Rs 700 per square metre considered by the government for working out the ad hoc value was not justifiable,” the CAG report said.

“When pointed out, the government replied in June 2012, that as the company was incurring loss of Rs 200 crore per day, due to delay in completion of the project, an ad hoc price of Rs 700 per square metre was fixed,” it said.

In its report, CAG also alleged “playing around rules” by the state government to grant land to Ford and L&T at concessional rates.

As per the report, the state government had allotted around 460 acres (18,63,687 square feet) of land valued at Rs 205 crore to Ford India Pvt Ltd “for the purpose of establishment of a mega project of automobile and engineering for manufacture of automobiles at the rate of Rs 1,100 per square feet, fixed by the State Level Approval Committee (SLAC)”.

It observed that the SLAC had not been empowered to fix the rate of land for allotment to mega projects (above Rs 1,000 crore investment).

After the discrepancy was pointed out, the government replied that the SLAC had decided the value of land, based on some concrete facts, which is an SLAC practice and the price was also approved by the Cabinet.

The CAG said that the reply from the government is not acceptable, since SLAC is not empowered to do valuation of land.

It also recommended that the state government follow a uniform policy for allotment of government land to safeguard its revenue and public interest at large.

CAG also highlighted the case of allotment of land to L&T measuring 8,53,247 square metres at Hazira, Surat for setting up facilities for manufacture of super critical steam generators and a forging shop for a nuclear power plant.

A District Level Valuation Committee (DLVC) had recommended the rate as Rs 1,000 to 1,050 per sq mt. As the value of the land exceeded Rs 50 lakh, the revenue department sent the case to the SLVC for valuation. The SLVC recommended the rate at Rs 2,020 in September 2007 and the revenue department forwarded the proposal to the state Cabinet, prescribing the same rate.

CAG noted that the cabinet, in February 2008, granted a special concession of 30 per cent on the value of land fixed by the DLVC and allotted the land at Rs 700 to Rs 735 per square metre, as it considered the project “high tech” and “of national importance” as well as the first of its kind in Gujarat.

“It was seen from the above that the concession was granted on the price of land recommended by the DLVC. Thus, non-adoption of the value of land fixed by SLVC, resulted in loss of revenue of Rs 60.66 crore even after granting 30 per cent concession on the final value of land fixed by SLVC. The percentage of concession worked out to 65.20 per cent on price fixed by SLVC,” the CAG report said.

 

#India- The Vanishing Crores- massive swindling in the Rs74,000-crore farm loan waiver


Finance

 

 

 

Devinder Sharma, March 7, 2013:

 

The financial outlay is not matching the outcome. If institutional credit is not reaching the farmers, where is it going?

 

 

Following the disclosure by the Comptroller & Auditor General (CAG) of the massive swindling in the Rs74,000-crore farm loan waiver, announced in the 2009 budget with a lot of fanfare, the entire provisioning of the farm credit allocations have come under a cloud.

Roughly 8-10 per cent of the beneficiary farmers, which means no less than 35.5 lakh farmers did not get any advantage of the loan waiver, and similarly a large number of undeserving farmers walked away with the exemption to repay.

This exposure comes at a time when questions are being asked about who benefits from the significant increases in farm credit being provided for in every budget. In 2012-13, a budgetary provision of Rs 5,75,000-crore for farm credit was made. A year earlier, in 2011-12, Rs 4,75,000-crore was provided. According to Reserve Bank of India, between 2000 and 2010, farm loans increased by 755 per cent. Certainly this is a mammoth growth, and it provides all the reasons to cheer.

This year, finance minister P Chidambaram further enhanced the budgetary allocation for farm credit to Rs 700,000-crore. This is certainly a quantum jump. It gives an impression as if such large availability of farm credit is serving the small and marginal farmers very well, and that all is well on the farm front.

But somehow the growth in the disbursement of farm loans does not match with the real performance on the ground. With over 2.90 lakh farmers committing suicide in the past 15 years, and with another 42 per cent farmers wanting to quit agriculture if given a choice, the continuing agrarian crisis on the farm front is a clear indication that the massive farm credit year after year is either not reaching the beneficiaries or being thoroughly misutilised.

The outlay is not matching the outcome. If institutional credit is not reaching the farmers, where is it going? Time and again we have heard that agricultural credit plays an important role in improving farm production, productivity and mitigating farmer’s distress. Such exuberance in loan disbursal comes at a time when in a recent study on ‘Farm Credit’, the industry association Assocham analysing the disbursement of credit over the last decade, has listed misdirection in farm loans, increase in proportion of indirect credit by banks, misuse of interest rate subvention for diverting credit to other sectors, imbalances in quantity of credit in relation to size of the farm and crops they raise, and virtual exclusion of small and marginal farmers from institutional credit as some of the major problems besetting this sector.

Mute spectator

If you have underlined the last point in Assocham report, it tells us very clearly where institutional credit has failed to deliver. By excluding small and marginal farmers, which forms nearly 80 per cent of the agricultural workforce, hasn’t the government actually failed to reach the benefits to those who need it more? How can the Reserve Bank of India be a mute spectator to the visible misdirection, which in reality should be more visible to them, all these years? Isn’t it a callous oversight or is it deliberate?

A damming news report in a Hindi daily brought out startling reality. According to the report, a confidential document available with the ministry of finance categorically states that despite the increase in farm credit by over 2.5 times in past five years, less than 6 per cent of the total institutional credit is made available to small and marginal farmers. Ironically, the prime minister, the finance minister, the agriculture minister and the ruling party along with its army of economists and planners never get tired of telling the nation of the remarkable strides taken in reaching credit to small and marginal farmers.

In other words, less than Rs 50,000-crore of the Rs 7 lakh crore provided for farm credit will actually benefit small farmers. Remaining amount of Rs 6.5 lakh crore at 4 per cent interest will be misappropriated by agribusiness companies, warehousing corporations and state electricity boards. Why can’t the finance minister therefore segregate the farm credit to tell us how much of it actually goes to farmers, and how much in the name of farmers to other allied activities?

In 2007, of the total credit of Rs 2,29,400-crore advanced by banks, small farmers share was a mere 3.77 per cent. In other words, 96.23 per cent of the farm credit disbursed in 2007 was actually cornered by big farmers or agribusiness companies. In 2011-12, while total farm credit had swelled to Rs 5,09,000-crore (against a target of 4,75,000-crore) small and marginal farmers got only 5.71 per cent. It is therefore obvious that despite knowing where the fault lies the government had deliberately supported agribusiness companies (an increase in indirect credit by banks by enlarging the definition of agriculture) in the name of small and marginal farmers.

It is primarily for this reason that small farmers have been left high and dry. They are left with no choice but to depend on the money lenders who charge exorbitant interests. No wonder, the serial death dance on the farms in the form of suicides show no signs of ending. It has a lot to do with the non-availability of institutional credit.
(The writer is a noted food and agricultural policy expert)

 

 

 

 

#India- Odisha has jeopardized agriculture to favour industry: CAG draft report , Finally its official


Author(s): T N Vijayalakshmi, downtoearth
Date: Jan 24, 2013

State went on MoU signing spree without considering food security and livelihood of people

Projects such as the POSCO steel plant in Jagatsinghpur district and Vedanta's bauxite mining proposal in Niyamgiri hills in Kalahandi have been stiffly opposed by local people, including affected tribals and forest dwellers (Photo by Sayantan Bera)  Projects such as the POSCO steel plant in Jagatsinghpur district and Vedanta’s bauxite mining proposal in Niyamgiri hills in Kalahandi have been stiffly opposed by local people, including affected tribals and forest dwellers (Photo by Sayantan Bera)

The Odisha government has committed the state’s natural resources like land and water to industries without bearing in mind agricultural needs, says a draft report of the Comptroller and Auditor General of India (CAG).

CAG has sought views of the state government before finalising its performance audit report—Commitment made in memorandums of understanding (MoUs) for setting up of industries in the state and acquisition/allotment of land thereof—that has slammed the Naveen Patnaik government.

Land, water and minerals being finite and scarce resources, its need-based allotment to different promoters of industries is required to be made keeping in mind the requirement in future, says the report. “The natural resources are not factors of production (only) for industrial growth but also for agriculture production on which the food security of the country rests, and these also had impact on sustainability of environment and sustenance of livelihood of citizen,” the draft copy, which is in possession of Down To Earth, says.

No assessment of availability of natural resources

Auditors have gone through scores of MoUs, minutes of government records, recorded views of departments and existing policies before observing that the state government has not made attempts to assess availability of natural resources prior to allowing industrial projects.

As many as 93 MoUs were signed by the state government with private promoters between 2001 and 2012 for setting up industries.
By March 2012, 35,793.498 acres of land (one acre equals 0.4 ha), which includes 25,012.345 acres of acquired private land and 10,781.153 of government land, was allotted to 54 companies under MoUs, 34 of which relate to the steel sector.

“But no policy or guidelines for assessing the need as well as other inputs like land, water and minerals, attracting entrepreneurs to the state through open competitive bidding, signing of MoUs with promoter companies for setting up industries in the state was formulated,” the draft performance report says.

CAG has invoked clause 9.11 of Industry Policy Resolution 2007, saying “all efforts should be made to avoid (allocation of) double cropped agricultural land and minimize R&R requirement.”

It was noticed that in 49 MoUs, commitment for providing 59,333.601 acres of land was made without any exercise to scrutinise the land category (whether agriculture, irrigated or double cropped)and no consultations were held with other departments like Revenue and Disaster Management, Water Resource, Agriculture department and district collectors. “This is indicative of the fact that the department has signed MoUs with promoter of industries and made commitments without assessing the actual availability of land, water and minerals,” the report says.

On minerals, the report says “it was noticed from minutes of 12 High Level Clearance Authority meeting held on January 27, 2010 that as against availability of 1,805.81 tonnes of total bauxite in the state, the department in different MoUs had already committed for supplying 74.61 tonnes of bauxite per annum for which the entire bauxite reserve of the state would be exhausted in next 24 years.”

Industry calls the shots

CAG has observed that industry decides where and how much land it needs.

Checks of MoUs and concerned files revealed that promoters themselves have selected the sites and applied for acquisition subject to their suitability. The Industrial Investment Promotion Corporation of Odisha Limited (IPICOL) has assessed the requirement and based on appraisal by it, Odisha Industrial Infrastructure Development Corporation (IDCO) has filed requisition with concerned collector for acquisition of land identified by the company,” the draft report says.

It goes on to say that no exercise was conducted by government to ascertain the availability of government land to ensure barest minimum acquisition of agriculture land.

Besides, the government has not selected sites suitable for establishment of steel and power projects, mining projects, other industries considering the availability of water, mineral, government and non-agricultural land, and approachability.
“As a result, sites for setting up of industries were identified by promoter companies and got regularized by applying through IPICOL and IDCO.”

Allotted land mortgaged

The CAG report also points out other irregularities. In one instance, administrative approval for acquisition of 1,745 acres of private land was given with the approval of minister for steel and mines prior to signing of MoUs with the promoters. “It is highly irregular and is indicative of extension of undue favour to private promoters,” the auditors observed.
What’s more, it has been found that permission has been given by IDCO to promoters for mortgage of allotted land and in eight out of 19 test-checked cases.

“The promoters concerned have mortgaged the allotted land in different banks to avail loans though no such commitment was made in MoUs. Revenue department has not even authorized IDCO to give such permission for creation of mortgage by the promoters,” the draft report says.

Ironically, IDCO does not have the information about the quantum of loan availed by promoters by mortgaging land resources. “Accordance of mortgage was highly irregular and the department has practically no monitoring on the issue,” the auditors said.

No estimation of benefits from industrialisation

No record could be provided to audit by IPICOL and IDCO and steel and mines department to show that due diligence has been exercised to examine the proposal of promoters and benefits that would accrue to the state and that would be extended to the particular project proponent before signing of MoU.

“We also found that neither any competitive bidding was made for selection of parties for setting up of any particular type of industry or infrastructure projects nor even any Request for Proposal (RFP) was issued. We noticed that states like West Bengal, Gujarat and Karnataka are inviting RFP for setting up of industries in the State,” said G Chandraprakash, deputy accountant general, in a letter addressed to state steel and mines secretary.

Chandraprakash wrote to the state, seeking its views for incorporation in the final performance audit report.

 

Flunking Atomic Audits- CAG Reports and Nuclear Power


 

English: Internationally recognized symbol. De...

English: Internationally recognized symbol. Deutsch: Gefahrensymbol für Radioaktivität. Image:Radioactive.svg (Photo credit: Wikipedia)

 

 

Vol – XLVII No. 39, September 29, 2012 | M V Ramana

 

The recent Comptroller and Auditor General‘s report on the Atomic Energy Regulatory Board and, more broadly, on nuclear safety regulation has highlighted many serious organisational and operational flaws. The report follows on a series of earlier CAG reports that documented cost and time overruns and poor performance at a number of nuclear facilities in the country. On the whole, the CAG reports offer a powerful indictment of the department of atomic energy and its nuclear plans.

M V Ramana (ramana@princeton.edu) is a physicist who works at the Nuclear Futures Laboratory and the Program on Science and Global Security, both at Princeton University, on the future of nuclear power in the context of climate change and nuclear disarmament.

The new report (Report No 9 of 2012/13) of the Comptroller and Auditor General (CAG) on the acti­vities of the Atomic Energy Regulatory Board (AERB) could not have come at a more appropriate time (CAG 2012). Concern about nuclear safety has naturally increased significantly since the multiple accidents at the Fukushima Daichi ­nuclear reactors. The response of the ­Indian nuclear establishment and, more generally the Government of India, to Fukushima can largely be characterised as an attempt to placate people’s concerns about the potential for accidents at Indian nuclear facilities. One element in that strategy was to emphasise that safety regulation at the Nuclear Power Corporation’s (NPC) facilities was impeccable. The CAG report has essentially demo­lished this claim.

Independence of Regulator

A basic tenet of regulation is that the safety regulator must be independent of industry and government. Article 8 of the international Convention on Nuclear Safety, which India has signed and ratified, calls upon signatores to “take the appropriate steps to ensure an effective separation between the functions of the regulatory body and those of any other body or organisation concerned with the promotion or utilisation of nuclear energy” (CNS 1994). The absence of such separation has been identified as one of the factors that led to the Fukushima accidents by the Independent Investigation Commission.1

India’s nuclear regulatory regime suffers from the same lack of effective separation. Despite India’s international commitments, awareness of best practices, and criticism by various outsiders, the CAG report pointed out, “the legal status of AERB continued to be that of an authority subordinate to the central government, with powers delegated to it by the latter” (CAG 2012: vi).

At first glance the AERB does seem independent of the department of atomic energy (DAE) and the NPC. It reports to the Atomic Energy Commission (AEC) rather than the DAE. The problem, as the CAG observed, arises from the “fact that the chairman, AEC and the secretary, DAE are one and the same” and this fact ­“negates the very essence of institutional separation of regulatory and non-regulatory functions” (p 12). The chairman of the NPC is also a member of the AEC. ­Another significant constraint on the AERB’s activities is that the organisation “is dependent on DAE for budgetary and administrative support” (p 13). What all this means, in effect, is that despite all pretences and claims to the contrary by the DAE and its attendant institutions, the AERB lacks power and independence. As common experience would indicate, it is hard to criticise one’s boss or force action in ways that he or she does not want. Of the 3,200 recommendations by the AERB’s Safety Review Committee for Operating Plants, the DAE had not complied with 375, with 137 recommendations dating back to earlier than 2005 (p 42).2

The lack of separation is not an accident, but a choice made by the nuclear establishment. As early as the 1970s, Ashok Parthasarathi, a senior bureaucrat and science adviser to the prime minister, had suggested that the

inspection of all nuclear installations from the point of view of health and environmental safety should be administered by a body with a suitable name and located in department of science and technology, as that department had been assigned the national responsibility for ensuring the preservation of environmental quality (Parthasarathi 2007: 131-32).

But even the idea of having an external agency monitor its environmental record was not acceptable to the AEC, let alone having someone monitor safety in its facilities.

In the subsequent decades, many have emphasised the importance of having an effective and independent regulator, in particular, A Gopalakrishnan, the chairman of AERB from 1993 to 1996 (for example, Gopalakrishnan 1999). Gopalakrishnan has also recounted many instances where the DAE and NPC have actively interfered with the safety activities of the AERB. Others from AERB have tried to defend the board, its independence, and its ability to monitor safety (for ­example, Parthasarathy 2011). Unfortunately, the situation for any regulatory agency is like that of Pompeia, Julius Caesar’s wife, of whom, Caesar is supposed to have said, “Caesar’s wife must be above suspicion”. Now, the CAG report adds to public suspicion of the independence of the AERB and it is not going to be easy for the AERB to be seen as capable of effectively regulating nuclear power.

From the AERB to the NSRA

The situation described by the CAG might change with the Nuclear Safety Regulatory Authority (NSRA) Bill of September 2011 being introduced in Parliament by the Government of India. Indeed, the DAE did state to the CAG “that the process of improving the existing legal framework for introducing greater clarity in respect of separation of legal responsibilities concerning promotional and regulatory functions had already been taken up”, mentioning the NSRA Bill (p 11). Essentially, the same argument has been offered by AERB secretary R Bhattacharya in response to the CAG report (Jog 2012).

Technically, that may be a valid defence, but just because the AERB is to be replaced by the NSRA – assuming, of course, that the government manages to get it through Parliament – should we be confident of the safety of the DAE’s nuclear facilities? The underlying problem highlighted by the CAG is not just the legal status, but one of effectiveness. And looking at the content of the bill and the context under which the NSRA has been created, it seems unlikely that it will create an effective separation between the regulatory authority and the nuclear establishment.

In the NSRA as has been envisioned, many of the key processes involved in ensuring effective regulation will continue to be controlled by the AEC. The power for crucial steps like the appointment of members is vested with the central government. But for most purposes, the authority empowered to act on behalf of the central government is the AEC. The AEC chairman will also be one of the key members of the Council of Nuclear Safety that will set the policies with respect to radiation and nuclear safety that will fall under the purview of the NSRA.

There is another problem that the CAG did not discuss. The AERB suffers from a lack of technical staff and technical facilities, and this lacuna has been exploited by the DAE (Ramana and Kumar 2010: 53). Further, there is little expertise outside the nuclear establishment on technical issues relating to nuclear facilities, and no proposed method of enhancing such independent expertise. For these reasons, there will continue to be cause for concern about nuclear safety in the country.

Plan Not, Care Not?

A different structural and institutional problem highlighted by the CAG report has to do with protection of workers from radiation. Earlier, each nuclear plant had a Health Physics Unit that was part of the Bhabha Atomic Research Centre (BARC). However, in 2009, these units were transferred from BARC to NPC. This “meant that the functions of monitoring of radiological exposure as well as the responsibility of radiological surveillance” is now with NPC – the operator of the reactors (p 45). In other words, “AERB had no direct role in conducting independent assessments and monitoring to ensure radiological protection of workers despite being the nuclear regulator of India” (p vii).

The CAG report also shows that the AERB has not exactly been particularly zealous about promoting nuclear safety, illustrating this through a plethora of examples. One is that it never fulfilled an official requirement from 1983 to prepare an overall nuclear and radiation safety policy, which would have given structure to practical radiation safety planning at lower levels. The AERB has not been proactive in participating in emergency planning exercises; the CAG notes that these exercises have highlighted ­inadequate emergency preparedness (p 61). Nor does the AERB have the mandate to take follow-up action with district or state authorities when it detects deficiencies in emergency preparedness (p 60).

The AERB has also not paid any attention to planning for decommissioning nuclear reactors. Nor has NPC. All nuclear plants in the country were operating without any decommissioning plans, including plants that are over 30 years old (p 65). The AERB did put out a safety manual on decommissioning in 1998, but neither the plants that were operating then nor the ones that were commissioned subsequently have produced a decommissioning plan. Now, on paper, each reactor that started operations after 1998 was required to submit such a plan before the AERB issued a construction or operating licence. This leaves two possibilities: The AERB did not insist on NPC following its regulations – or NPC did not bother to comply with the requirement, and there was not much AERB could do about it. Neither of these possibilities is comforting.

The CAG vs the DAE

Though this is the first time the CAG has looked at nuclear regulation, the agency has exposed various other problems with the DAE in its audits from earlier years. It is perhaps the most prominent government body to openly criticise several aspects of the DAE’s functioning. The few examples listed below should ­illustrate the agency’s ongoing monitoring of various facets of the DAE and how the nuclear establishment has fallen short on so many dimensions.

The trend started with the 1985-86 report, which included for the first time an audit of a nuclear power project (Chandrasekharan 1990: 1024).3 In what was to become a pattern, this first report documented cost and time overruns in the case of the Madras Atomic Power Station (MAPS). Approved in 1965 at a cost of Rs 60 crore each, the capital cost more than doubled for each of the reactors, with substantial increases in 14 of 20 expenditure heads, and the projects were delayed by over eight years for each reactor. These “constituted inadequacies in planning of the projects rather than wages of development of indigenous technology” (Chandrasekharan 1990: 1026). Even with inadequate provisions for decommissioning, repairs, waste management, and so on, the CAG found that the rate of return on capital was only 3.5% and not the 12% expected of power projects.

A couple of years later, the CAG found a similar pattern of cost and construction time increases with the Narora reactor, noting that in 10 major heads of expenditure there had been cost overruns of 188% or more (CAG 1988). This was well before the reactor was commissioned, and the final cost figures were significantly higher. What was important was that the CAG’s conclusion that the revision of costs indicated that the project got “approved on unrealistic cost estimates” and its censure of the DAE saying, “Unrealistic cost estimates and optimistic time schedules make financial allocations and controls less meaningful” (CAG 1988).

Some years later, in 1993, the CAG studied yet another reactor – the Fast Breeder Test Reactor (FBTR) – and found again not only the pattern of cost increases and time overruns, but also that its performance was wanting (CAG 1993). The CAG documented that by the time the reactor first became critical in 1985,4 the net time overrun had become 220% and the corresponding increase in cost had gone up by 164%. The CAG also described several of the incidents and accidents involving the FBTR during just the first five years of operation. These included a nitrogen leak in 1987, followed by “a complex mechanical interaction due to fuel handling error in the reactor damaged certain ‘in-vessel’ components” that took two years to rectify; and the failure of the load cell and damage to the Capsule Transfer Gripper (CTG) in 1989.

Over the years, the CAG has also documented cost increases, time overruns, and/or poor functioning with a number of other nuclear facilities. These include the Tuticorin (Chandrasekharan 1990: 1028-29), Baroda (CAG 1988), and Manuguru heavy water plants (CAG 1994),5 Dhruva research reactor (Chandrasekharan 1990: 1029), Waste Immobilisation Plant (WIP) and Solid Storage Surveillance Facility (S3F) at Tarapur (CAG 1996), the Nuclear Fuel Complex (CAG 1998), and the Nuclear Desalination Demonstration Plant at Kalpakkam (CAG 2008).

In 1999, the CAG audited another aspect of the DAE’s functioning: its propensity for making large-scale expansion plans. Such grandiose projections have been a staple of the DAE’s strategies to garner political and financial support (Ramana forthcoming). In 1984, the DAE drew up a plan to set up 10,000 MW of nuclear power by the year 2000. What actually materialised from the profile was shocking:

Against the targeted additional power generation of 940 MW by 1995-96, gradually increasing to 7,880 MW by 2001 AD, the actual additional generation of power under the profile as of March 1998 was nil in spite of having incurred an expenditure of Rs 5,291.48 crore” (CAG 1999: 20).

The implications of this abject failure to deliver for current projections of nuclear expansion are profound.

This impressive, if depressing, series of reports by the CAG points to an even more depressing reality: the DAE cannot be easily forced to change its ways. For example, despite the CAG’s warning after its Narora case study not to get projects approved on “unrealistic cost estimates and optimistic time schedules”, the DAE continues with this practice till today. Its flagship project – the Prototype Fast Breeder Reactor – was initially expected to be commissioned in 2010 (Subramanian 2004), but has been delayed by more than three years; the update from January 2012 was that the reactor would go critical in early 2013 but that would be followed by “a year of testing” before it is declared commercial (IANS 2012). Its cost estimate has gone up from Rs 3,492 crore to Rs 5,677 crore, as of November 2011, when approximately 80% of the work on the reactor had been completed (Srikanth 2011).

Conclusions

Many have written about the nuclear establishment’s safety problems, problems with radiation exposure, accounting problems, and so on (some examples are Bidwai 1978; Subbarao 1998; Gopalakrishnan 1999; Gopalakrishnan 2000; Subbarao 1999; Dias 2005; Ramana 2007; Ramana and Kumar 2010). The CAG’s advantage has been in its access to various documents that would be unavailable to members of the public.6 Put together, the CAG reports, including the latest one, amount to a pretty damning assessment of the DAE and its activities. The CAG has done its bit. It is up to Parliament, and to the population at large, to hold the DAE accountable.

Notes

1 As the Fukushima Nuclear Accident Independent Investigation Commission’s Official Report to Japan’s Diet put it, “The TEPCO Fukushima Nuclear Power Plant accident was the result of collusion between the government, the regulators and TEPCO, and the lack of governance by said parties. They effectively betrayed the nation’s right to be safe from nuclear accidents” (Fukushima Nuclear Accident Independent Investigation Commission 2012: 16).

2 There are other ways in which the DAE has marginalised the AERB. In the case of the Kalpakkam Atomic Reprocessing Plant, AERB approval for construction was sought only in 1994 when “construction of the plant was already in progress” (Sundararajan, Parthasarathy and Sinha 2008: 26). What, one wonders, were the odds that AERB would disapprove of the project even if it had found a problem with the design?

3 Earlier reports had, in the words of an official history of the CAG, not included any “worthwhile comments” on the AEC or the DAE “despite the massive expenditure incurred in the development of nuclear energy and connected research and development” all of which was “virtually kept shrouded in mystery and secrecy, except the publicised benefits leaked out to the media by the Department/Commission” (Chandrasekharan 1990: 1024).

4 Even then, the reactor was not fully functional and the steam generator, essential for producing electricity, began operating only in 1993 (Hibbs 1997).

5 We have already written about the case of the CAG and heavy water plants in the pages of this journal (Ramana 2007).

6 The CAG “scrutinised records relating to issue of consents, authorisations, licences, and regulatory inspections; minutes of various committee meetings; utility correspondence files; project reports, etc, during the period September to November 2010 and September to October 2011” (p 5).

References

Bidwai, Praful (1978): “Nuclear Power in India – A White Elephant?”, Business India, 4 September.

CAG (1988): Report by the Comptroller and Auditor General of India, Comptroller and Auditor General, New Delhi.

– (1993): Report by the Comptroller and Auditor General of India, Comptroller and Auditor General of India, New Delhi.

– (1994): Report by the Comptroller and Auditor General of India, Comptroller and Auditor General of India, New Delhi.

– (1996): Report by the Comptroller and Auditor General of India, Comptroller and Auditor General of India, New Delhi.

– (1998): Report by the Comptroller and Auditor General of India, Comptroller and Auditor General of India, New Delhi.

– (1999): Report by the Comptroller and Auditor General of India, Comptroller and Auditor General of India, New Delhi.

– (2008): Report by the Comptroller and Auditor General of India, Comptroller and Auditor General of India, New Delhi.

– (2012): Report by the Comptroller and Auditor General of India, Comptroller and Auditor General of India, New Delhi.

Chandrasekharan, R K (1990): The Comptroller & Auditor General of India: Analytical History 1947-1989 (New Delhi: Ashish Publishing House).

CNS (1994): “INFCIRC/449 – Convention on Nuclear Safety”, http://www.iaea.org/Publications/Documents/Infcircs/Others/inf449.shtml

Dias, Xavier (2005): “DAE’s Gambit”, Economic & Political Weekly, XL (32): 3567-69.

Fukushima Nuclear Accident Independent Investigation Commission (2012): The Official Report of the Fukushima Nuclear Accident Independent Investigation Commission (Tokyo: The National Diet of Japan), http://naiic.go.jp/en

Gopalakrishnan, A (1999): “Issues of Nuclear Safety”, Frontline, 13 March. http://www.flonnet.com/fl1606/16060820.htm

– (2000): “Undermining Nuclear Safety”, Frontline, 24 June.

Hibbs, Mark (1997): “Kalpakkam FBR to Double Core, Load First Thorium-232 Blanket”, Nucleonics Week, 38 (48): 10.

IANS (2012): “India’s First PFBR to Go Critical Early 2013”, Zee News, 21 January, http://zeenews.india.com/news/nation/igcar-finalises-design-of-commercia…

Jog, Sanjay (2012): “AERB Downplays CAG Report, Says High Safety Standards Maintained”, Business Standard India, 24 August,http://www.business-standard.com/india/news/aerb-downplays-cag-report-sa…

Parthasarathi, Ashok (2007): Technology at the Core: Science and Technology with Indira Gandhi (New Delhi: Pearson Longman).

Parthasarathy, K S (2011): “Atomic Energy Regulatory Board Not Quite Subatomic”, Economic Times, 19 April.

Ramana, M V (2007): “Heavy Subsidies in Heavy Water”, Economic & Political Weekly, XLII (34): 3483-90.

– (forthcoming): The Power of Promise: Examining Nuclear Energy in India (New Delhi: Penguin India).

Ramana, M V and Ashwin Kumar (2010): “Safety First? Kaiga and Other Nuclear Stories”, Economic & Political Weekly, XLV (7): 47-54.

Srikanth, R (2011): “80% of Work on Fast Breeder Reactor at Kalpakkam Over”, The Hindu, 27 November.

Subbarao, Buddhi Kota (1998): “India’s Nuclear Prowess: False Claims and Tragic Truths”, Manushi, 109: 20-34.

– (1999): “Is Our Nuclear Regulator Effective?”, The Observer of Business and Politics, 9 December.

Subramanian, T S (2004): “A Milestone at Kalpakkam”, Frontline, 19 November.

Sundararajan, A R, K S Parthasarathy and S Sinha, ed. (2008): Atomic Energy Regulatory Board: 25 Years of Safety Regulation, Atomic Energy Regulatory Board, Mumbai.

 

 

 

Ek Tha Tiger: The other side of the coal scam


 

I’ve spent the past few days reading a couple of page-turners that I recommend strongly to every Indian who cares about her country: the CAG’s audit report on coal block allocations, and a new report released by Greenpeace, titled ‘How Coal-Mining is Trashing Tigerland’. Both are freely available online, at the CAG and the Greenpeace websites respectively. 
 
Till now, the media has focused primarily on the CAG report. But you have to read both together to get the full picture about the implications of coalgate.  
 
The CAG’s audit report makes three things amply clear: one, in the last seven years, the government of India has given a major push to coal-based power; two, a lot of private players have made a lot of money out of coal, and more through speculation than by actually producing coal; three, the office of our beloved incorruptible prime minister was right in the thick of coalgate, having chosen to avoid a transparent process of competitive bidding — opting instead to award coal blocks through a ‘screening committee’ — despite being advised by its own legal experts that a competitive bidding process would not contravene the existing mining laws. 
 
Yes, the corruption in the coal block allocation is mind-boggling. I mean, can someone even explain what Rs1,800,000,000,000 means – on a human, as opposed to a cosmic, scale?
 
But corruption is only half the coalgate story – the half that’s easier to tell, because it doesn’t challenge any of our assumptions.  
 
Coal mining is the biggest threat to the tiger
The more significant story, in my opinion, is the one which will affect every one of us far more directly than the notional loss of Rs1.8 lakh crore ($33 billion). It’s the story of what’s in store for you (I’m referring here specifically to those Indians who are not NRIs, don’t have a second home or loving relatives abroad where they can run away to, don’t have a Swiss account nobody knows about, and are not planning to emigrate to New Zealand or Canada in the foreseeable future) when all the 150-odd coal blocks allotted by the Union coal ministry between 2004 and 2009 are mined.  
 
The basis of the Greenpeace study is something you can try yourself: Take an India map. Referring to the CAG report, plot the locations of all the coal reserves and allocated coal blocks on this map. Then take another India map and plot on it the locations of all the tiger habitats and reserve forests in central India. Then superimpose one map on top of the other. You will discover a) that the bulk of India’s coal reserves fall in central India – covering the states of Madhya Pradesh, Chhattisgarh, Jharkhand and parts of Odisha and eastern Maharashtra; and b) that the coal fields in central India are contiguous with dense forests and intrude into the territory of India’s national animal, besides several other endangered species. 
 
What will ensue if we allow coal mining in these forests is the worst kind of environmental and human disaster we’ll ever know (short of a nuclear calamity; but Manmohan Singh, the architect of the Indo-US nuclear deal, has that covered, too, viz Jaitapur, Kudankulam et al). To summarise in brief, developing our coal reserves in central India will involve the following: extinction of the Royal Bengal Tiger from this region; the decimation of at least a million hectares of native forests in central India (the biodiversity and forest ecosystems that took millions of years to evolve, we will gobble up, termite-like, in 40 years flat, turning lush forests into gaping, polluted, barren wasteland); destruction of the livelihood source of half of India’s Scheduled Tribe population; destruction of watersheds of major rivers, including the Mahanadi, Narmada, Tapti, Godavari, Indravati, and Damodar; incalculable loss of India’s bio-diversity and natural beauty that i s a part of our national heritage (something which no agent of private capital masquerading as a public servant, least of all a Manmohan or a Montek, can understand the value of); and the shame and blow to national pride that the next generation of Indians will have to live with when they wake up to the monumental idiocy of their fathers in destroying so much for the greed of so few in so short a time, and that too for a dirty, climate-hostile, limited, non-renewable fuel that anyway cannot solve India’s energy problems.  
 
What if we tried to attach an economic value to a loss on a scale like this? The Dutch research institute CE Delft did exactly such a study of the externalised global costs of the impact on human/ environmental health and climate change caused by coal-mining and combustion, and arrived at a figure of $452 billion for 2007 alone. That’s more than a dozen times the magnitude of the estimated loss due to coalgate ($33 billion). And the figure is especially scary when you consider that India is not only the world’s third largest coal-producing nation, but also the fourth largest importer of coal.  
 
Why India can and should wean itself off coal
What’s really alarming is that, despite coal being in the news, nobody seems to be debating a simple question (where are you Arnab Goswami? The nation needs an answer to this one): Can’t India grow without increasing its reliance (pun unintended, believe me) on the dirtiest fossil fuel around?  
 
Today, more than 50% of India’s energy needs are met by coal. But it has been established that coal is one of the worst contributors to climate change – it contributes not only through greenhouse gas (GHG) emissions, but also through destruction of the forests when it is mined. [Forests trap atmospheric carbon in their biomass and are major carbon sinks. This is the basis of the UN’s REDD+ (Reduced Emissions of Deforestation and Degradation) programme which offers incentives to developing countries to preserve their forests – an incentive India is well-placed to tap, IF we keep away from coal and leave the forests alone.] 
 
Of course, the reality is that many of our policy wonks are climate sceptics who believe it’s OK to use up all our coal reserves before we look at alternatives to coal. As writer Peter Dolack asks in his blog, Systemic Disorder, “There is delusion, and then there is willful fantasy. At what point does the first pass into the second?” Well, if you too are a climate change sceptic, here are some hard facts: 
  • The 20 hottest years on a global basis have all occurred since 1987
  • 9 of the 10 hottest years in recorded history have occurred since 2001
  • June 2012 marked the 328th consecutive month that the global temperatures exceeded the 20th century average
  • For 2010 and 2011 combined, 27 countries recorded an all-time national high temperature while one recorded a national low
 
There is complete consensus among climatologists that anthropogenic climate change (global warming caused by human activity) is REAL. The debate is only about how much time we have before the rising temperatures go into a destructive feedback loop. The seeds of doubt are being peddled only by a bunch of think tanks funded by the oil and natural gas industry. Exxon Mobil reportedly spent $16 million just between 1998 and 2005 funding denier groups, according to a Monthly Review article in May 2012. And in India, we have our own bunch of industry-sponsored ‘experts’ who want to limit the debate on India’s energy future to two equally moronic, dangerous and completely irrational choices: nuclear energy (dirty but clean) and coal (dirty but cheap). 
 
The alternative to coal is renewable and doable
Renewable forms of energy accounted for half of all new electric capacity added globally in 2010, and delivered 20% of global power supply. They are cleaner, their costs of production are rapidly coming down, and India, specifically, is superbly placed to tap all three major renewables – solar, wind and biomass. 
 
Yet it is only rarely that we hear of the most rational option around which to secure our future energy needs: a diversified basket of renewable energy produced in a decentralised manner. Why? Because decentralised renewable energy (DRE) models based on solar, wind and bio-mass don’t give a tiny elite with a monopoly over power and money, an opportunity to make “windfall profits” (that’s the CAG’s term, by the way) in as short a time with as much ease and secrecy and as little transparency as centralised mega-power projects such as nuclear power (sorry, national security, so we won’t tell you anything) or coal (just get a ‘recommendation’ from the state government and you get a coal block absolutely FREE! What a scheme! If I were a businessman with political connections, I’d love it too!).  
 
Renewables, on the other hand, are decentralised by design. They can be community-owned and controlled instead of being state or corporate owned. They could be home solar panels, biogas plants fed from farmyard manure, or wind turbines in farmers’ fields. Damian Carrington has written in theGuardian about a small German hamlet called Feldheim whose inhabitants produce all the power they need locally, from some 43 turbines scattered across their fields – they don’t need the major utilities anymore (read: they are fine without coal or nuclear power). 
 
Incidentally, another rigorously researched Greenpeace report asserts that India can have 92% of its energy needs met from renewable sources by 2050. Germany increased the share of its electricity produced from renewable sources to 25% in 2012 from 6.3% in 2000, and has already made investments to make this 35% by 2020. We have far more MW (megawatt) of renewables at our disposal than Germany. So why can’t we? Who stands to benefit if India doesn’t pursue this option and goes for expensive nuclear energy and dirty coal power instead? 
 
The shenanigans of the coal lobby
But the frightening reality is that we are going all out for coal, even when it’s clear that it’s a fuel we neither need nor want but are merely addicted to for the present. And this addiction is partly by design. Why were so many coal blocks given away for free to private players, many of whom had no background in power generation or even manufacturing? Why were more coal blocks allotted than were needed to meet our production targets as per the 11th Plan? Why were private players allowed to set up so many coal-powered thermal power plants (71 in water-scarce Vidarbha alone, but that’s another story for another day) without any prior infrastructure or arrangement for coal supply?  
 
One answer: it’s an old ploy employed by India Inc. Once you’ve already set up a hundred coal-powered power plants, then you can always talk about ‘demand’ and ‘shortfall’ and pressure the ministry of environment and forests (MoEF) into clearing more coal blocks. This was how the No Go zones – areas of dense forest cover, tiger corridors and bio-diversity hotspots – which the MoEF and the coal ministry had provisionally agreed on in 2010, were scuttled by the latter under pressure from the industry lobby.  
 
The establishment of No Go zones was a brilliant idea. In one stroke, it would have resolved the uncertainty over environmental clearance for every individual mining project, while at the same time securing India’s basic environmental objectives such as keeping tiger territories inviolate and protecting reserve forests. 
 
Does anyone remember the hue and cry that was raised when it was reported in 2005 that tigers had been wiped out of the Sariska reserve? Everybody, including, presumably, the tiger-loving, patriotic managements of corporate groups like the Adanis, the Tatas, Jindals, Bhushan, Reliance, Hindalco, Vedanta, and Arcelor Mittal must surely have been saddened by the dwindling numbers of India’s national animal. There are barely 1,700 of them left according to a 2010 estimate from the National Tiger Conservation Authority (NTCA).  
 
Yet these corporates are at the forefront of coal mining projects that spell doom for not one, not two, but at least ten tiger reserves in central India. All the coal fields in this region are in close proximity to the tiger reserves. Not just the mining activity, but also the infrastructure that goes with mining – a road and rail network, at the minimum – will destroy tiger corridors (between two reserves) and fragment their forest habitat in such a way that the reserves will no longer be able to sustain a tiger population. 
 
But those who spend all their time thinking about how to make money tend to have a narrow kind of personality that simply has no mind-space for realities that cannot be processed through profit-loss filters. Some of these businessmen even cynically used the long blackouts on July 30-31 caused by multiple grid failure (which had nothing to do with a shortfall in coal supply) to lobby for environmental clearances for more coal blocks and coal mining projects. But the fact remains that the MoEF has given enough clearances to exceed our coal production targets right up to 2017.  
 
In any case, our coal reserves (the ones that are economically viable for mining) will run out in 40 years. As of today, India has already lost 70% of its forest cover. If we went ahead and extracted all the coal we can mine, we would have finished off much of the remaining forest cover too [please note: in carbon terms, there is no comparison between afforestation initiatives (‘forests’ planted by man) and the native forests with their richness in carbon-trapping bio-mass. Afforestation can never match the carbon density and biodiversity of a destroyed native forest]. 
 
De-allocate the ‘coalgate’ mining blocks
There are three solid reasons for de-allocating the 150-odd coal blocks sanctioned under coalgate and putting a permanent moratorium on any fresh allocations.  
 
First, the private players have already made their money. In fact, the CAG reports says that only one of the 57 blocks allotted to the private sector has been developed, which means that most of them have not spent money on developing the mines allotted to them, as they should have, as per Plan projections. In an insightful article on First Post titled, ‘Who wins, who loses from Coalgate? The markets know’, Arjun Parthasarathy, the editor of the appropriately named investorsareidiots.com, explains how the beneficiaries of the coal allocations have raked it in – they cashed in on rising market valuations on the back of their acquisition of coal blocks and land. When their stock prices crashed post the CAG report, it was the shareholders who lost the most.  
 
Two, many of these mines are in No Go zones or zones which should be No Go if you consider the environmental implications rationally. If we decide to leave the forest alone, we can look at alternative renewable sources plus encash the forest cover under REDD+. 
 
Three, because the process of allocation was flawed, it’s only fair (to those who didn’t get any) that they are all cancelled. And once you cancel them, it’s a good opportunity to have a national debate on whether we shouldn’t put a lid on coal-mining in forest areas once and for all.  
 
From ownership to trusteeship
There seems to be a belief prevalent among our ruling classes that the state owns all of the country’s forests and natural resources. Hello – it does not. Not only do the forests not ‘belong’ to the state, it does not even ‘belong’ exclusively to all human beings taken together. Other living species, passport-bearing citizens of what a Greenpeace campaign describes as ‘Junglistan’, also have a claim on it. We humans are at best trustees, and as a representative only of humans, the state, too, is a trustee of the forests and rivers that fall within the man-imagined borders of the man-made entity that has no basis in the natural world – the nation state, and the parasite whose host it is, the corporation.  
 
We need to look at our forests and national resources through the prism of trusteeship and not ownership. The problem is: try telling that to the mandarins who run the show in the PMO and the commerce ministry.  
 
The twin ideas of capitalist industrialisation and endless economic growth were born at a time in history when human beings had no conception of ‘limits’ to natural resources. It was assumed that raw materials can be extracted wherever found, ad infinitum.  
 
Now the ability of technology to extract has far outstripped the ability of the planet to supply. And the large-scale destruction of the natural environment and phenomena like global warming are symptoms of this mismatch between the scale of technology and the scale of the planet. One sobering example of this mismatch is that humans have enough nuclear bombs to destroy the planet many times over, but no power to create another planet when this one is gone, eaten out from the inside by a particularly virulent strain of the human species that reports only to Capital and answers only to profit. 
 
The deadly coalition
So, if we look at the big picture, and not just at short-term fixes, the writing is pretty much on the wall: we have to choose between coal and our tigers/forests. If we choose coal, we can enjoy our dirty electricity in the short term but we and our children (and those of you in your twenties now) will most definitely get screwed by environmental disasters in the long-term, and screwed in ways that many of us don’t yet have the imagination to fully comprehend. 
 
So let the CAG and the Greenpeace report be a wake-up call. Read them both if you haven’t already. If there’s one message that leaps out from this exercise, it is this: India needs to decouple economic growth from fossil fuel, and most definitely from coal. And not only is this not difficult, it is also good business, and profitable in the long run. The only thing stopping us from taking this path is the all-powerful coalition of corporate giants and political dwarves. Corruption is just one name for this coalition and what it does. But it does not even begin to encapsulate the scale of damage that this coalition can unleash if left unchecked. 
 
G Sampath is an independent writer based in Delhi. He is reachable at sampath4office@gmail.com

Coalgate caused a loss of Rs 1.86 lakh crore: CAG Report


 

Coalgate caused a loss of Rs 1.86 lakh crore: CAG

 

 

The CAG’s final report on the coal block allocations will be tabled in the Parliament today The report is not naming the Prime Minsiter’s Office (PMO) PMO or the states and the blame is put solely on the steering committee, reports CNBC-TV18’s Pallavi Ghosh quoting sources.

 

 $33 billion-Coal scam”report by CAG tabled today in the parliament that lists Tata group, Naveen Jindal group, Essar group, Abhijeet group, Laxmi Mittal‘s Arcelor and Vedanta among the beneficiaries.

 

The report on coal blocks allocation suggests that it could be an even bigger embarrassment than the 2G spectrum allocation scam with top private companies making a windfall of Rs 1.86 lakh crore due to lack of bidding.
The final draft of the CAG report on the coal blocks allocation, says that the allocation of captive coal mines from 2004 to 2006 was not transparent. Notably, Prime Minister Manmohan Singh held the Coal Ministry portfolio from 2006 to 2009.
It further said that a six-year delay in moving to competitive bidding led to huge losses to the state.
The CAG report lists Tata group, Naveen Jindal group, Essar group, Abhijeet group, Laxmi Mittal’s Arcelor and Vedanta among the beneficiaries.
However, CAG does not mention the role of the PMO and state governments in the coal blocks allocation.
The auditing watchdog has blamed the steering committee recommendations that gave away captive coal mines without bidding.
The CAG report has said that the delay in introducing competitive bidding, first suggested in 2004, led to major benefits to the private sector, but the rules for auction only got finalised six years later in 2012 after a series of controversies.
Till 2004 June, only 39 blocks were allotted, but in order to improve the production, 142 allotments were made between July 2004 and 2006 to private and government companies.
The CAG says the allocation made by the steering committee was not transparent and helped many private players. As many as 15 blocks given to private players did not even start production till March 2011.
The Central Bureau of Investigation (CBI) is also investigating the coal scam. Initial reports of the investigating agency suggest they are looking at the role of state governments in allocating without bidding.
(With inputs from Ibnlive.com)

 

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