Business Standard reported that Chhattisgarh government allegedly favored Adani Group in unwarranted amendment in tender condition for payment of coal mining fee that caused a potential loss of about INR 1,500 crore to the state exchequer.

Comptroller and Auditor General report for 2012 said that “Since the role of the JVC was only to develop, mine and transport the coal to the power plant of the company for which it had quoted the rate, passing of the benefit of higher grade coal to the JVC was not justifiable particularly in view of the fact that the company is the owner of the mine and whatever grade of coal was extracted, the same would be used for its own consumption.”

The CAG report said that “Thus, by changing the pricing clause in the tender, the company had extended undue benefit to the JVC,” adding that because of this unwarranted amendment, the company is likely to lose INR 1,549.04 crore during the entire period of the CMSA.

The CAG officials said that the JVC was to get the price for F grade coal as mentioned in the tender. Since the reserve had D and E grade coal that had higher price, the JVC was paid for higher grade by changing the clauses mentioned in the tender that resulted in a huge loss.

Adani Enterprise Limited and the state run Chhattisgarh State Power Generation Company had formed a JV to develop, mine and transport coal from Parsa coal block in Sarguja to latter’s Janjgir based Marwa Thermal Power Project. The block under Hasdeo Arand coalfields allotted to CSPGC in 2006 has an estimated reserve of 150 million tonnes.

Though Parsa was an unexplored coal block, but as per the Regional Exploration Report of the Geological Survey of India, the overall quality of coal in the area was of D to E grade. The tender invited for Coal Mining and Service Agreement mentioned the rate for the lowest F grade of coal. During the pre-bid conference, the AEL raised a query regarding the applicable basic price of coal, if after detailed, exploration, the quality of coal was found to be better quality than F grade coal. The CSPGC clarified that the discount would be applicable on price of actual grade of coal instead of  grade coal.

Courtesy: Business Standard