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Coal Ministry may tighten coal auction process in next round

27 Apr 2015 Evaluate

The coal Ministry is looking to tighten up the process in the next round of coal blocks auction and may cap the number of bids a corporate can make for a mine at one, in case multiple bids are made, the best one will be counted. In the previous round of auctions, one group could not only put in more than one bids but all or many could make it to the final list. Now, it will be just one bid from one group.

In the last two auctions, while there were norms set for a minimum number of bids for a mine to be put up for auction, no restrictions were placed for multiple bids by one group. For the mines auctioned till now, bidders were required to make a price offer at the technical bid stage itself. Only 50 per cent of those who qualified in the technical stage (subject to a minimum of five bidders) were allowed to participate in the financial bidding and were then ranked according to the initial price offering.

Naveen Jindal’s Jindal Steel & Power (JSPL) put in multiple bids for same mines - Gare Palma IV/8, Jamkhani, Utkal C, Gare Palma IV/1, Gare Palma IV/2&3, and Gare Palma IV/7, while Aditya Birla Group and Sesa Sterlite used sister companies to make several bids. The government has rejected bids received in the last round for four coal blocks. The mines whose bids were rejected include Gare IV/2, Gare Palma IV/3 and Tara coal blocks in Chhattisgarh in which JSPL had emerged as the highest bidder, and Gare Palma IV/1 mine bagged by Bharat Aluminium Company.

After the success of two rounds of coal blocks auction, the government will be launching a new round of coal block auctions. This will be a part of the 204 blocks, which are being auctioned. The government has already garnered over Rs 2 lakh crore by auctioning just 33 blocks.


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