HC notice to govt on plea against coal block auction norms

Delhi High Court today sought the government's response on Bhushan Power and Steel Ltd's plea challenging the coal block auction norms, claiming that some of them were contrary to the 2014 Coal Ordinance.
A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva issued notice to Coal Ministry on Bhushan Power and Steel Ltd's (BPSL) plea challenging government's decision to hold two-phase bidding and allowing more than one bid for a block from a single company.
Under the auction process, each company has to give an initial price offer for a block, following which, 50 per cent of the lowest bids or bidders are eliminated and the rest move to the second round to submit final financial bids.

The tender document also allows a company to bid for a block in the name of its different bifurcated units, which BPSL has said will lead to "multiplication of bids" by one company and destroy competition.
BPSL, represented by senior advocate P Chidambaram, said in such a situation one company can stack its bids so that only its bids come on the top 50 per cent and rest get eliminated.
It also contended that merely because a company bid less in the first round does not mean it cannot bid the highest in the next.
BPSL also claimed that the government had "illegally and arbitrarily" decided to earmark Jhamkhani coal block in Odisha for the unregulated sector, due to which steel, sponge iron, cement and other coal-based industries can bid for it.

"Central government has illegally, arbitrarily and discriminatingly bunched up the specified end-use of cement, iron and steel and captive power plant," it said and added there is "no authority under the 2014 Ordinance to do that".