NEW DELHI: Allowing multiple bids by corporates through joint ventures or group arms left much to be desired in regard to the competitiveness of the first-ever auction of coal mines held in 2014-15, the Comptroller and Auditor General has said while pointing out shortcomings in one of the Narendra Modi government ’s success stories.The Comptroller and Auditor General’s report on the first two rounds of auctions, tabled in Parliament on Tuesday, also pointed out undervaluation to the tune of Rs 382 crore in the upfront payment that successful bidders make to the government.But the report is not all criticism. It has some words of praise too, describing the electronic auction as "an improvement over the earlier system" which "attempted to incorporate the principles of objectivity, transparency and fairness in allocation of natural resources to private sector companies".The government opted for e-auction after the Supreme Court scrapped allocation of 204 blocks in 2014 since they were not given without bidding. Altogether 29 blocks, categorised as producing and ready-to-produce, were auctioned in the first two rounds for captive use by power, steel and cement plants."In a scenario, where the standard tender document allowed participation of joint ventures and simultaneously limited the number of qualified bidders which could participate in the e-auction, audit could not draw an assurance that the potential level of competition was achieved in the stage-II bidding," the report said for 11 blocks.The report pointed out under-determination of the upfront payment in case of 15 mines, for which the CAG carried out a revised calculation of intrinsic value of the coal mines by calculating cost and revenue after considering all the deficiencies together in individual mines. According to this calculation, the under-determination works out to 41% of the total upfront amount of Rs 932.44 crore.In six non-regulated sector blocks, floor prices were under-determined by amounts ranging between Rs 4.70 per tonne and Rs 1264.44 per tonne.The CAG asked that if the bidding criteria were right, as the coal ministry claimed, why were these changed in the third round.From the third round onwards, the government said bids by group arms or JVs would be considered as one bid from the parent. This was done as to prevent cartelisation or price-rigging after bids for some blocks were found to be way different from the general trend in other similar blocks.