Comptroller and Auditor General (CAG), in its audit report (Civil & Commercial) for 2010-11, had in April pulled up Chhattisgarh Mineral Development Corp (CMDC) Ltd for accepting a single bid for commercial mining of coal from a block allocated by the Centre.
According to a statement by the government of the BJP- ruled state, Coal block Bhatgaon-II and Bhatgaon-II Extension were allotted by the central government to CMDC for commercial exploitation. CMDC decided to develop these blocks through a Joint Venture with a coal mining company with CMDC retaining 51 per cent equity.
"For selection of the JV partner with 49 per cent equity, CMDC resorted to open competitive bidding. Number of bids received for Bhatgaon-II and Bhatgaon-II Extension block were five and two, respectively of which two and one, respectively were found meeting the qualifying criteria.
"As per the bidding conditions, bidders were required to submit offers regarding the minimum amount to be paid by them to CMDC for each tonne of coal mined," it said.
CMDC was, thus, to receive 51 per cent of the net profit from the mining of coal or the minimum assured amount offered by the successful bidder, whichever is higher.
"Thus, this is a case of selection of JV partner through competitive bidding for development of coal blocks and not that of allotment of coal block," the statement said.
It said CMDC as also the state government had brought out the facts to the notice of the Chhattisgarh Accountant General (AG). "However, AG not being equipped by geological expertise, failed to appreciate the technical differentiation between the two blocks and arrived at hypothetical loss by comparing uncomparables," it said.
