CAG, the government auditor had on Friday mentioned that private firms are massively profited with the coal blocks they were allocated after being nominated in auctions for a competitive bidding. This had been a loss to the nation's treasury which stands at a humongous sum of Rs 1.86 lakh crores.

CAG reports which have been tabled in the Parliament today mentions companies like Essar Power, Hindalco, Tata Steel, Tata Power, Jindal Steel and power and 20 others which have been nominated to have coal blocks in different states.

With the delay that was caused in competitive bidding, the current method had been a benefit to the private companies. “Audit has estimated financial gains to the tune of Rs 1.86 lakh crore likely to accrue to private coal block allottees," the report mentions regarding the allocation of coal blocks.

These estimates were made after taking average cost of production and average sale price of opencast mines of Coal India for the year 2010-11 into consideration.

A decent percentage of this gain could have made its way to the country's exchequer if the competitive bidding had been implemented earlier for the allocation of coal blocks, the CAG said.

The government's auditor mentions the need for a "strict regulatory and monitoring mechanism to ensure that benefit of cheaper coal is passed on consumers".

The proposal for competitive bidding for the allocation of captive coal blocks was made in 2004 but the modus operandi for the bidding is yet to be finalized delaying the introduction of the method even today.

(AW- Anil)