NEW DELHI — India's state auditor on Friday accused the government of allocating coal blocks, power projects and land for Delhi's flagship airport at a fraction of market prices, potentially costing the exchequer tens of billions of dollars in lost revenues. The main opposition party demanded an immediate explanation from the beleaguered government of Prime Minister Manmohan Singh, particularly about one report that suggested private companies made windfall gains of about $33 billion because of the underpriced sale of coal fields. The opposition has sought to link Singh, who was in charge of the Coal Ministry in 2006, to the affair, which the media has dubbed “Coalgate”. “We want an explanation from the prime minister who was in charge of the Coal Ministry during the period of sale,” opposition Bharatiya Janata Party leader Rajiv Pratap Rudy told reporters after the report was released. In a draft of its report, which was leaked earlier this year, the state auditor estimated that private companies' “windfall” gain from allocations had amounted to a much larger figure, $211 billion. Singh has lurched from crisis to crisis since the same auditor uncovered corrupt practices two years ago in the sale of telecoms licenses. The telecoms sale may have cost the government up to $36 billion. Shares in Reliance Power, India's second-largest power producer by market value, tumbled on Friday after they were mentioned by the Comptroller and Auditor General (CAG) in the auditor's reports which were presented in parliament. Singh's office maintains the government was simply following established policy, and before the report was released, Singh denied there had been wrongdoing. “The report will not stand because it is not based on proper evidence,” said V. Narayansamy, a junior minister in the prime minister's office. In another report CAG also said airport land was allocated at a tenth of its market value, giving the developers an undue profit of $4.3 billion. Shares in GMR Infrastructure Ltd, who the auditor said was sold airport land too cheaply, fell sharply. India has for years allocated coal blocks directly to companies on the basis of recommendations by state governments. Since 2004 the government has said it will change to more transparent auctions, but had not done so even in February of this year, the report said. The federal auditor also pulled up the government for what it said was unduly favoring the GMR Infrastructure Ltd led consortium that was awarded the contract for the upgrade of the international airport in New Delhi in 2006. — Reuters
