Hyderabad: A fresh audit has flagged serious lapses in the functioning of Singareni Collieries Company Limited, pointing to flawed contracts, weak oversight and avoidable financial losses in its mining operations.The report by the Comptroller and Auditor General of India, tabled in the assembly, examined overburden removal (OBR) contracts awarded since Feb 2019 and found major discrepancies in diesel consumption norms. In contracts using conventional equipment, actual diesel use exceeded prescribed limits, while in heavy earth moving machinery (HEMM) contracts, consumption was far below norms. This mismatch suggests that the company’s diesel benchmarks were unrealistic and poorly designed, it said.Overburden — the soil and rock removed to access coal — is central to opencast mining. The audit noted that HEMM deployment costs were 12.36% to 32% higher than conventional equipment. Despite this, the company failed to include safeguards in contracts to prevent misuse of HEMM or overuse of conventional machinery, leading to avoidable expenditure of ₹251.05 crore. Weak enforcementThe report also highlighted weak enforcement of contract terms. Delays in acting against violations in OBR contracts resulted in further losses of ₹74.19 crore. In addition, poorly planned coal transportation linkages forced field units to move coal inefficiently, adding to costs. In pricing, the audit found that surface transportation charges were fixed without factoring in actual expenditure. This led to excess collection of ₹1,078.94 crore from coal consumers, raising concerns over pricing practices.Environmental compliance was another concern. Three OBR contractors in sampled areas failed to set up mandatory effluent treatment plants, as required under contract conditions. In underground operations, the Srirampur area preferred river sand for stowing instead of cheaper and more sustainable alternatives like bottom ash and processed overburden, increasing costs and environmental impact. Overall, the audit points to systemic gaps in setting norms, drafting contracts, enforcing rules, planning logistics and ensuring compliance. It has recommended that the state government and the company tighten diesel norms, strengthen contract safeguards, improve transport planning and pricing, and prioritise environmentally sustainable practices.
