WBPDCL not debarred illegally to participate in auctions: Coal Ministry

The Centre on Monday refuted media reports that West Bengal Power Development Corporation Limited was illegally barred by the Coal Ministry from participating in an auction for coal mines located in West Bengal.

"An article has been published in a section of media alleging that the Union Government illegally barred West Bengal from coal auctions, benefiting a corporate.

"It is alleged that the Coal Ministry disqualified West Bengal Power Development Corporation Limited (WBPDCL) from participating in the auction of West Bengal-based coal mines considering WBPDCL as a prior allottee and has not paid additional levy within the prescribed time," the Ministry of Coal said in a statement.

The allegations made in the article are incorrect and baseless, the ministry said.

Coal mines are allocated through auction to government and private companies and through allotment only to government companies, it added.

As per Section 4(4) of the Coal Mines (Special Provision) Act, if the prior allottee has not paid additional levy, then the prior allottee, its promoter or any of its company of such prior allottee shall not be eligible to bid either by itself or by way of a joint venture.

Accordingly, WBPDCL being one of the promoters of Bengal Emta Coal Mines Ltd, (a prior allottee as per the CMSP Act) was disqualified from participating in the auctions.

Provision for allotment of coal mines to government companies or corporations was also given in section 5 of the second ordinance as well as the CMSP Act.

As per Section 5(2) of the second ordinance as well as the CMSP Act, no allotment shall be made to a prior allottee, if that allottee has not made the payment of the additional levy within the specified period.

Since WBPDCL was not a prior allottee, it was eligible to get mines through allotment as per section 5(2) of the CMSP Act. Accordingly, mines were allotted to WBPDCL.

It has also been alleged that firms of one group had colluded while bidding for the Sarisatolli mine auction and the central government had cut down potential competition for the private company by illegally preventing the West Bengal government from bidding for the block.

"The allegations of collusion and less competition for private company are baseless. As per the bidding document, a joint Venture (JV) company formed by two or more companies having a common Specific End Use (SEU) were independently eligible to bid in the e-auction," the ministry said.

This provision was kept to encourage bidders to bid aggressively from the initial stage and to restrict bidders from the same company to form a cartel, thus reducing competition.

In the case of the Sarisatolli coal mine, five bidders were technically qualified for participation in the e-auction (FPO) and a total of 167 quotes and bids were received during the auction, which is a clear indication of strong competition, the ministry said.