Coal auction: Eight blocks dropped from 2nd phase

Three first-stage winners to wait for 're-examination'

Coal block auctions hit a major milestone on Monday with the signing of agreements for the first batch of 15 blocks. However, the achievement was not without problems. In a last-minute change, eight coal blocks were withdrawn from the upcoming second phase of auctions. Even for the concluded first phase, the government has chosen not to sign agreements for three blocks won by Jindal Power, BS Ispat, and Balco.

Among the coal blocks kept out of the second phase of auctioning and listed in Schedule-III of the coal ordinance, Utkal B1 & B2 in Odisha are embroiled in court cases filed by prior owner Jindal Steel & Power, whereas Rohne in Jharkhand has been dropped for want of environment clearances. The others that did not make it to the list include Dongeri Tal-II, Kosar Dongargaon and Marki Mangli-IV. There were only two bidders for these blocks. According to the rules of the tender document, the bidding for that block would be annulled if there are less than five bidders.

Among the major bidders in the fray for these coal blocks are Jindal group with 11 bids and Adani Power with 10 bids.

In the first phase, Jindal Power had won Gare Palma-IV/2&3 in Jharkhand, which it had owned earlier, at the lowest bid in the auction at Rs 108 a tonne. This is also the richest mine among all with six-million tonne annual capacity and the end-use is power generation.

The other blocks kept for the power sector have received high bids at Rs 1,110 a tonne for Tokisud in Jharkhand and Rs 940 a tonne for Trans Damodar in West Bengal. The auction of Gare Palma-IV/1 was concluded in two hours compared with 12-15 hours for other blocks.

According to senior coal ministry officials, the nominated authority for coal auction will “compare the comparables in the auction such as bid price and time duration of auction”. The officials added that re-examination would get concluded in two or three days.

In the unregulated steel, cement and iron sectors, Balco won Gare Palma-IV/1 at Rs 1,585 a tonne and BS Ispat won Marki Mangli-3 in Maharashtra at Rs 918 a tonne.

The bids were low in comparison to price bids such as Rs 3,502 for Bicharpur block.

Through the auction of 18 coal blocks in the first phase, the government received total proceeds of Rs 1.35 lakh crore, which will go to six mineral-rich states. In the second phase, 16 coal blocks will go under the hammer.

The government is re-allocating cancelled coal blocks by the Supreme Court in a phased manner through a transparent e-auction process.

ENERGY AUCTION

IN THE FIRST PHASE

• Gare Palma IV/7, won back by Jindals, goes under “re-examination”, government to examine low bid and short-time duration of bidding
• JSPL had tweeted "#Won'tgiveitback" after winning the block
• BALCO & BS Ispat also to wait for signing agreement, as nominated authority to look into their bid amounts
• Bid price, time duration and bidders to be compared sector wise, report to come in three days

FOR UPCOMING PHASE

• Eight coal blocks dropped, final list has 11 blocks
• Auction for 4 blocks annulled, others to be held later
• Adani & Jindal to fight in the coming phase with maximum bids
• Others in fray: Sesa Sterlite, Hindalco, JSW Energy