'Our whole concept of coal mine allocations is wrong'

[rajnikant]

SHooo Bhakt Shoo......

Bhai bola na tujse na ho paega..shoo-shoo D) hi karta rahega hamesha...
kabi kuch aur b kiya kar.. #AdarshLiberal

 

[Levina]

Bookmarked your post.....

Thats what had come to my mind too after I'd read wolfyy's post.
@wolfschanzze

@levina - Apa Jee, you're a civil engineer whats your take on the issue ?

Errr
whats the connection???
You're a chartered accountant, coal and ts auction is related to your field.

frankly, in last few days I've only read the headlines of coal auctions, I did not even attempt to read the article, this so because I know it would whoosh over my head. But I read some interesting debate here. Thanks to @Bang Galore @Rain Man @Guynextdoor2

 

[Bang Galore]

Would you give a jack about the government choosing the 'most transparent' manner but the services like power and other industries being affected adversely?

Where is the proof of that? That is just an assumption being made, one not proven & infact negated by the successful auction. This is a product available through imports & unless someone saw a financial incentive, they wouldn't be bidding. In any case, what is the alternative? How would you decide whom to give what & under what conditions & how would you then guarantee that all that happens isn't the licensee making windfall gains?

And we're talking complete shut down of so many coal mines and other plants, thereby stripping millions of employment directly and indirectly.

No evidence of that either? What closure? Most of then are blocks where no work is being done. Period. Are you by any chance confusing this with iron ore mining?

Auction was and is not in public interest. And afaik, that's what the end object of any government government action should be. And so that of any established procedure.

Of course it is. Financial windfalls in the revenue of the states not in the balance sheets of some private companies alone.


Here's an editorial in the New indian express. Just to pint out that there are not many takers for your line.

Auctions the Best Way to Sell National Resources


The auctioning of telecom spectrum and some coal mines has fetched a mindboggling `3 lakh crore till Monday. Nobody had imagined that it would fetch such a large sum of money. What’s more, a large number of coal mines are yet to be auctioned. It is a jigsaw puzzle how many lakhs of crores the whole auction process would fetch. The 2G and 3G telecom spectrum that was auctioned was different from the one involved in the “2G scam”. However, the coal mines, which were sold through e-auctions, were the same ones involved in the Coalgate scam. The present auctions were facilitated by the Supreme Court which cancelled the allocations made by the previous government.

When the then Comptroller and Auditor General (CAG) assessed the loss the exchequer incurred when the 204 coal blocks were allocated at `1.86 lakh crore, he was pooh-poohed by no less a person than then prime minister Manmohan Singh. He, in fact, described the sum as illusory. The former prime minister would have been shocked to know that 32 of the 204 cancelled coal blocks alone have fetched a much larger sum of `2.07 lakh crore. In retrospect, the CAG could only be accused of underestimating the loss the exchequer had suffered. The nation would be grateful to the Supreme Court for taking a principled stand which ultimately brought a huge sum to the public exchequer.

The success of the e-auctions imparts a lesson or two to the government when it comes to selling natural resources. These resources do not belong to the government of the day. Rather, they belong to the whole nation. So when they are sold, the government should ensure that they get the best price which can be used for the national good. There are no better ways to ensure this than by selling them through open auction where everyone can take part and quote his price. Transparent auction is the best way to sell resources like coal and spectrum. It ensures higher revenue for the Centre and the states and cheaper power for the consumer.

Auctions the Best Way to Sell National Resources -The New Indian Express



Actually, corruption of this kind can be fixed. There is a direct correlation between regulation and corruption - the higher the regulation, greater the scope for malpractices of all kinds. If you look at the scandals that have got exposed in the recent past, you will realise that these have happened in highly controlled sectors: telecom, energy, defence and real estate. The moment discretionary powers are taken out of the hands of bureaucrats and processes become transparent, corruption just melts away.

The biggest example of this change is telecom. The spectrum scandal of 2007-08 happened because the telecom minister had the power to bend rules. The moment the system of allocations was replaced with auctions, corruption ended. There was nothing left to be fixed. Earlier, telecom, too, was a ministry rife with intrigue and subterfuge. Not any longer. The touts and power brokers have been driven out of business.

When the switch to auctions happened, there were apprehensions that services would become expensive and all telecom companies would plunge into losses. None of that has happened: India continues to have one of the cheapest tariffs in the world, and the efficient companies are making decent money. In fact, most of them have become more efficient in the use of spectrum. Only if a resource is bought at the right price will it be used efficiently. And even if a company chooses to bid outrageously, it should bother only the company's shareholders, certainly not the policy makers, taxpayers and subscribers. Thankfully, the government has decided to walk down the same path for coal blocks.

Bhupesh Bhandari: Few Good Men | Business Standard Column

 

[utraash]

Thats what had come to my mind too after I'd read wolfyy's post.
@wolfschanzze








Errr
whats the connection???
You're a chartered accountant, coal and ts auction is related to your field.

frankly, in last few days I've only read the headlines of coal auctions, I did not even attempt to read the article, this so because I know it would whoosh over my head. But I read some interesting debate here. Thanks to @Bang Galore @Rain Man @Guynextdoor2

Wolfy deserves kudos ... I even passed that info then to my WhatsApp group where everyone also just stunned to see this just like us....
@wolfschanzze

 

[Lord ZeN]

SHooo Bhakt Shoo....

Is there something wrong with you. Calling random trolls/members on this forum as Bhakts. Instead of using the word "troll" you seems to be obsessed with the term "Bhakt".

 

[Levina]

Wolfy deserves kudos ... I even passed that info then to my WhatsApp group where everyone also just stunned to see this just like us....
@wolfschanzze

Good idea!!!

 

[utraash]

Good idea!!!

I have got dozens of thumbs up for sharing that...
Btw its shameful that we are ourselves not aware of own value system whereas passionately learn roman numbers or other measuring system...
Don't know whom should I curse for this...
Fault lies with us...

 

[utraash]

Ash Mujhse toh woh save nahi hua...the pic appears like a small white band...but you can't read the text. How did u save it?
It appears like this on mine..

View attachment 203373

Mam I faced the same ... But then I took screen shoot n shared with Wikipedia links ....

 

[Sneaker]

You have no idea what you're talking about. Give the domestic steel industry a couple of years and it will eventually die unless there's a shift in the present government's policy. (I can only talk about steel because I only have information regarding steel industry)

Modi's Make in India is relying heavily on imported steel, killing the domestic players. It is not even profitable for most to manufacture steel, not because they're inefficient but because of the policies of the government.

I cannot say about others but the one company I know is a big player in steel, no longer makes a profit and rather compensates for the loss by earning profit in the other sector it is involved in. And this is the case despite introduction of new technology and super efficient methods to manufacture steel.

The biggest producer of steel in India, SAIL, plant manager lamented why they were suffering losses. Because of third party mining. these "specialized mining companies" sold all high-grade ores to overseas (mainly Japan) and only rejected ores were sent to SAIL plants. SAIL was crying for captive mines but no good quality mines were allocated to it.

Let's say you give me a cow for free. It gives 5L milk everyday, worth Rs.120 market price but sell at Rs. 150.
Now there's another guy who also got a cow for free, gives the same amount of milk and he's in direct competition with me. Do you think I'll sell at Rs. 150 or just at a marginal profit price so I can remain in competition?

Couldn't have explained it simpler, that's what you call the market forces coming into play.

And who do you think wins in this situation? The consumer obviously, since the acquisition cost doesn't get passed on to him.

Your logic is so weird. If a group of people fund the cow (tax payers) but only 10% drink most of the milk, is giving cow for free there by befitting only 10% plus the farmer is in general interest? Or taking the price of the cow form the farmer so that 10% people who consume most milk pay the proper price for it and something useful to 50% people can be done from that money will be in public interest?

 

[Guynextdoor2]

Where is the proof of that? That is just an assumption being made, one not proven & infact negated by the successful auction. This is a product available through imports & unless someone saw a financial incentive, they wouldn't be bidding. In any case, what is the alternative? How would you decide whom to give what & under what conditions & how would you then guarantee that all that happens isn't the licensee making windfall gains?



No evidence of that either? What closure? Most of then are blocks where no work is being done. Period. Are you by any chance confusing this with iron ore mining?



Of course it is. Financial windfalls in the revenue of the states not in the balance sheets of some private companies alone.


Here's an editorial in the New indian express. Just to pint out that there are not many takers for your line.

Auctions the Best Way to Sell National Resources


The auctioning of telecom spectrum and some coal mines has fetched a mindboggling `3 lakh crore till Monday. Nobody had imagined that it would fetch such a large sum of money. What’s more, a large number of coal mines are yet to be auctioned. It is a jigsaw puzzle how many lakhs of crores the whole auction process would fetch. The 2G and 3G telecom spectrum that was auctioned was different from the one involved in the “2G scam”. However, the coal mines, which were sold through e-auctions, were the same ones involved in the Coalgate scam. The present auctions were facilitated by the Supreme Court which cancelled the allocations made by the previous government.

When the then Comptroller and Auditor General (CAG) assessed the loss the exchequer incurred when the 204 coal blocks were allocated at `1.86 lakh crore, he was pooh-poohed by no less a person than then prime minister Manmohan Singh. He, in fact, described the sum as illusory. The former prime minister would have been shocked to know that 32 of the 204 cancelled coal blocks alone have fetched a much larger sum of `2.07 lakh crore. In retrospect, the CAG could only be accused of underestimating the loss the exchequer had suffered. The nation would be grateful to the Supreme Court for taking a principled stand which ultimately brought a huge sum to the public exchequer.

The success of the e-auctions imparts a lesson or two to the government when it comes to selling natural resources. These resources do not belong to the government of the day. Rather, they belong to the whole nation. So when they are sold, the government should ensure that they get the best price which can be used for the national good. There are no better ways to ensure this than by selling them through open auction where everyone can take part and quote his price. Transparent auction is the best way to sell resources like coal and spectrum. It ensures higher revenue for the Centre and the states and cheaper power for the consumer.

Auctions the Best Way to Sell National Resources -The New Indian Express



Actually, corruption of this kind can be fixed. There is a direct correlation between regulation and corruption - the higher the regulation, greater the scope for malpractices of all kinds. If you look at the scandals that have got exposed in the recent past, you will realise that these have happened in highly controlled sectors: telecom, energy, defence and real estate. The moment discretionary powers are taken out of the hands of bureaucrats and processes become transparent, corruption just melts away.

The biggest example of this change is telecom. The spectrum scandal of 2007-08 happened because the telecom minister had the power to bend rules. The moment the system of allocations was replaced with auctions, corruption ended. There was nothing left to be fixed. Earlier, telecom, too, was a ministry rife with intrigue and subterfuge. Not any longer. The touts and power brokers have been driven out of business.

When the switch to auctions happened, there were apprehensions that services would become expensive and all telecom companies would plunge into losses. None of that has happened: India continues to have one of the cheapest tariffs in the world, and the efficient companies are making decent money. In fact, most of them have become more efficient in the use of spectrum. Only if a resource is bought at the right price will it be used efficiently. And even if a company chooses to bid outrageously, it should bother only the company's shareholders, certainly not the policy makers, taxpayers and subscribers. Thankfully, the government has decided to walk down the same path for coal blocks.

Bhupesh Bhandari: Few Good Men | Business Standard Column

BS article. Not only are auctions fixable, most are fixed. First you fix the players by putting in qualifications that are specific to them, then you eliminate the people you don't want by putting in more 'procedural' stumbling blocks, then once a cartel is formed, they'll netotiate between themselves- I want X so bid less tthan me there, I want Y, so bid less than me there and so on. Only a simpleton or a moron will think this will 'remove corruption', like the author says.

The biggest producer of steel in India, SAIL, plant manager lamented why they were suffering losses. Because of third party mining. these "specialized mining companies" sold all high-grade ores to overseas (mainly Japan) and only rejected ores were sent to SAIL plants. SAIL was crying for captive mines but no good quality mines were allocated to it.


Your logic is so weird. If a group of people fund the cow (tax payers) but only 10% drink most of the milk, is giving cow for free there by befitting only 10% plus the farmer is in general interest? Or taking the price of the cow form the farmer so that 10% people who consume most milk pay the proper price for it and something useful to 50% people can be done from that money will be in public interest?

Then the policy is to stop the exports.

@Bang Galore , turns out saner minds are advocating the alternate approach too.

Was former CAG Vinod Rai right on spectrum and coal auctions? No, he was wrong on both counts - The Economic Times

The recommendation for coal is 'abolition of captive mining' and revenue share. Now go ahead and dispute this guy too.

 

[Sneaker]

BS article. Not only are auctions fixable, most are fixed. First you fix the players by putting in qualifications that are specific to them, then you eliminate the people you don't want by putting in more 'procedural' stumbling blocks, then once a cartel is formed, they'll netotiate between themselves- I want X so bid less tthan me there, I want Y, so bid less than me there and so on. Only a simpleton or a moron will think this will 'remove corruption', like the author says.



Then the policy is to stop the exports.

Yeah, stop export and make them sell to SAIL viz, make them captive mines. See.. Major problems with your argument is
1. You don't have data to support your argument - What is the cost difference between a ("professional" miner + their profit)-(captive mining cost). Basically, what is the inefficiency of the current bidders compared to "professional" miners?
2. Why can't these bidders acquire efficiency in mining? simple core competency statement is BS. TATAs make from salt to airline.. What is so high-tech in coal mining that these companies will not be able to master?

 

[Guynextdoor2]

Yeah, stop export and make them sell to SAIL viz, make them captive mines. See.. Major problems with your argument is
1. You don't have data to support your argument - What is the cost difference between a ("professional" miner + their profit)-(captive mining cost). Basically, what is the inefficiency of the current bidders compared to "professional" miners?
2. Why can't these bidders acquire efficiency in mining? simple core competency statement is BS. TATAs make from salt to airline.. What is so high-tech in coal mining that these companies will not be able to master?

I said stop export, when did I say captive mines? BTW core competency is the rule now. Even tatas have exited several businesses in the last 20 years to focus on a few items. Voltas, soaps etc. have been given off to reduce businesses breadth and increase focus.

 

[Sneaker]

I said stop export, when did I say captive mines?

Stopping export doesn't mean ore comes to SAIL.

 

[Guynextdoor2]

Stopping export doesn't mean ore comes to SAIL.

you said export was the biggest problem. Now don't waste my time if you don't have clear points.

 

[Sneaker]

you said export was the biggest problem. Now don't waste my time if you don't have clear points.

LOL, yes exports were biggest problem. But if you ban export, it doesn't solve the problem..it creates new one.. Funny that you can't see simple fact, don't have any data to support your assertions but keep on ranting about how everything this govt is doing is wrong while not accepting what UPA did was disastrous...