Notwithstanding the time and again reprimand by the Comptroller and Auditor General (CAG) on lack of transparency in allocation of natural resources, the Manmohan Singh Government continues to “sit tight’’ on the second generation of reforms suggested by the Ashok Chawla Committee which includes adoption of open, transparent and competitive mechanism for allocation of natural resources and greater disclosure of existing approval process.
The Committee reports, which continues to gather dust in the corridors of power, has recommended following a competitive bidding route for allocation of coal blocks, switching to open acreage licensing policy for allocation of oil and gas blocks, making public the minutes of the meeting of the Standing Linkage Committee (Long Term) pertaining to allocation decisions on coal, putting in public domain the minutes of the managing committee (MC) for oil and gas blocks and making the Directorate General of Hydrocarbons (DGH) an independent entity.
The report of the Committee has been hanging fire since it was submitted in May 2011 and accepted by the Group of Ministers headed by Pranab Mukherjee at its meeting on October 15, 2011. What is even more shocking is the failure of the Government to put this important report in public domain for debate despite repeated requests from various stakeholders, The Ashok Chawla Committee, headed by the former Finance Secretary, had been set up to in early 2011 to suggest transparent and corruption process for allocation of natural resources.
For the petroleum and gas sector, the Committee is of the strong view that there should be more public disclosure of issues relating to investment audit and exploration commitments and address concerns about the asymmetry in past bid monitoring. It has strongly pitched for greater disclosure of existing approval processes, such as meetings of the MC. “the documents approved by the MC and the reasons thereof should be in the public domain. This disclosure level of the Norwegian Petroleum Directorate could be a good starting point in this regard,’’ it has stated.
Pitching for strong transparency in the coal sector, the Committee has stated that format of the minutes of the meeting of the Standing Linkage Committee (Long Term) were allocation decisions are made should be standardised. “These minutes should include specific justifications for both accepting and rejecting applications,’’ it said. The Committee has recommended allowing independent mining firms to take part in the auctions for captive blocks, with suitably notified groups of end user firms. It has also recommended creating a platform for transaction of coal. “This platform could be owned by Coal India Limited (CIL) to meeting current regulatory needs. The surplus coal from captive mines could be sold to the platform for onward sale to registered users. This would be an extension of the current policy that allows excess captive production to be sold by CIL and would also need to be examined in Ministry of Coal. Imported coal could also be offered through the coal transaction platform,’’ it adds.
The Committee has also pitched for Open Acreage Licensing Policy (OALP) for allocation of oil and gas blocks in a move that could bring exploration and production business environment on par with global standards. Under the open acreage policy, an exploration company can express its interest in a block any time as opposed to the current system of periodic auction of blocks by the government.
The Committee has also recommended that a trading platform/exchange should be created for developing a robust and transparent market for natural gas with regulatory oversight being exercised by the downstream regulator, the Petroleum and Natural Gas Regulatory Board (PNGRB).