NEW DELHI, March 26 (UPI) -- India lost about $210 billion in revenue because of underhand coal deals, a report says.
A draft report by India's comptroller and auditor-general, leaked to The Times of India newspaper, says that approximately 100 Indian private and state companies were awarded contracts for 155 coal fields from 2004-09, sidestepping a competitive bidding process.
The report noted that the $210 billion loss was likely a conservative estimate, because it relied on prices for low-grade coal only.
In its review of the document, the Financial Times reported that it also shows that 60 of 86 allocated coal concessions awarded had failed to begin production as planned by March 2011, resulting in the country's coal output falling more than 50 percent below target.
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"This would imply that either some of the allocattees were non-serious about production and/or the set of incentives which was required to help expedite commencement of production was not available," India's comptroller and auditor-general report says.
A number of the remaining Indian coal projects, the Financial Times said, have faced hurdles in land disputes, environmental clearances and in the allocation of mining licenses, which the report said can take up to eight years to receive.
Arvind Mahajan, head of natural resources and infrastructure at KPMG India, told the Financial Times, "Auctions are transparent and they maximize revenues, but introducing them means users will have to pay much more for coal, in turn meaning that the cost of power would go up."
"The more important issue is when will the government look at more competition in the coal sector in general to allow coal companies to sell in the open market, which isn't allowed at the moment," he said.
The leaked report comes amid India's massive coal shortfalls.
While coal-fired plants account for 55 percent of India's installed electricity capacity, India's Ministry of Power has indicated that the country was likely to face a coal shortfall of 238 million tons during the 12th 5-year plan, which began this year.
An editorial Saturday in the Indian Express newspaper in response to the leaked report notes that in India's power sector, an estimated 40,000 megawatts of capacity is being derived from "coal linkages and blocks handed out absolutely free, based almost entirely on a discretionary, point-based screening system."
"Despite getting these fuel linkages for free, most of these projects will sell the electricity generated in the market at commercial rates," the editorial says. "So end-consumers do not stand to gain in terms of cheaper power because of the government's largesse in offering free coal."
