Coal auction: Re-examination of low bids to take more time

While industry awaits clarity on the bids received in the coal e-auction and being re-examined by the government, senior officials said the matter could take “some more days”.

Of the 34 blocks, auctioned in two phases, letters of allocation for eight have not been signed with the successful bidders. These blocks, according to the ministry of coal, had comparatively low bids and would need a re-look by the Nominated Authority (NA) for the re-allocation.

“The central government wanted some details from the NA on the low bids, which has been submitted. The inter-ministerial committee has also reviewed the report,” said a senior official. Ministry officials said clarity on the matter would take some days. If any irregularity, there is an option of re-auction, said a senior official.

The bids in question were put by Jindal Power, Bharat Aluminium and BS Ispat in the first phase. Jindal's was for the power sector and the other two for unregulated steel, cement and iron ore. In the second phase, the low bids of Jindal Power, Hindalco, Usha Martin and Tirumala Industries are being examined.

Sector majors awaiting a letter of allocation are not amused at the delay and some might be contemplating legal recourse. “Such selective action by the NA/government is arbitrary and misusing the power given by the ordinance. This can question the entire process. Such action dampens the investor sentiment and are neither in the interest of industry or consumers,” said an executive. It is estimated 371 million tonnes of extractable reserves are held up in getting allocation letters, of the auctioned 1,698 mt.

Industry says the auction process was conducted to discover the real value of the coal and as claimed by the government, “the price discovered was done through a transparent and honest method.” How, then, some executives asked, could the government question its own transparent process?

Second look

• Bid re-examination might take more than couple of days
• Low bids received in two phases of e-auction being re-examined
• Jindal Power: Gare Palma IV/2 & 3 in Chhattisgarh for Rs 108 per tonne
• Jindal Power: Tara West Bengal for Rs 126 per tonne
• JP Associates: Mandla South Madhya Pradesh for Rs 1852 per tonne
• BALCO: Chotia Chhattisgarh for Rs 3025 per tonne
• Hindalco: Dumri Jharkhand Rs 2127 per tonne
• BS Ispat: Marki Mangli-III Rs 918 per tonne
• Usha Martin: Brinda & Sasai Jharkhand Rs 1804 per tonne
• Tirumala Indsutries: Meral Jharkhand Rs 727 per tonne