1. Coal auction: Govt cacels 4 blocks amid speculation of cartelisation; Jindal Steel emerges biggest loser

Coal auction: Govt cacels 4 blocks amid speculation of cartelisation; Jindal Steel emerges biggest loser

'Coal Ministry will deliberate before taking the final decision on the rejected bids,' Coal and Power Minister Piyush Goyal said.

By: | New Delhi | Updated: March 21, 2015 2:37 PM
coal auction, coal block auction, coal bill, Jindal Steel

Jindal Steel and Power, controlled by former lawmaker Naveen Jindal and one of the biggest beneficiaries of the previous method of coal block allocation that the Supreme Court ruled illegal, has now become the biggest loser with three of its bids rejected. (Reuters)

The government has cancelled bids of Jindal Steel and Power (JSPL) and BALCO for four coal blocks amid speculation of cartelisation and said it will take a final decision on these mines after deliberations.

“Department (Coal ministry) will take the final decision on the rejected bids, it will deliberate and then decide,” Coal and Power Minister Piyush Goyal said today.

When asked whether these blocks will be re-auctioned or allotted to Coal India, Goyal said the department will take a call on it. He was speaking on the sidelines of an event of Indian Chambers of Commerce.

The Coal Ministry, had late last night, rejected the bids of Jindal Steel and Power Ltd (JSPL) and Balco for four blocks amid reports of speculation of cartelisation during the recent coal block auction.

The government was re-examining the bids for nine coal blocks, including those where Jindal Steel & Power (JSPL) and Balco emerged top bidders in the recently held auction.

“Bids for Gare Palma IV/1, IV/2, IV/3 and Tara coal blocks not accepted,” Coal Secretary Anil Swarup had tweeted early on Saturday.

Government takes decision on bids for 9 coal blocks after examination. Bids for 5 blocks accepted.

Jindal Power had emerged as successful bidder for Gare IV/2, Gare Palma IV/3 and Tara coal blocks, while Bharat Aluminium Company (Balco) had successfully bid for Gare Palma IV/1 coal block.

However, bids for five other blocks have been accepted, Swarup said.

There had been reports that some bidders could have indulged in cartelisation to keep the prices low for the concerned mines.

“In the schedule II, we were looking at four mines and in schedule III we are looking at five mines … Prima facie we found that it requires a re-examination, so it has been re-examined that is about all,” Swarup had earlier said.

The bids that were re-examined also included Marki Mangli III block, which was bagged by BS Ispat.

While insisting that the government “has not looked at any such thing as cartelisation or anything of such sort”, the secretary had said: “I have used the word ‘outliers’. There is a pattern and if somebody falls outside that pattern that needs a examination.

“Whether it is a cartelisation or not it not something which I can say as of now. We are certainly not examining these aspects. We are examining if there is an outlier, the reason for it, and then we will take a call”, he had said.

So far, a total of 33 coal blocks have been auctioned in two tranches. While in the first lot 19 coal mines were auctioned, in the second lot 14 coal blocks went under the hammer.

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  1. V
    Vijay kumar
    Mar 21, 2015 at 7:57 pm
    this is yet a small decision which make Modi a big decision maker. Such decisions set an example for others to avoid corruption. Great!
    Reply
    1. A
      Abhi
      Mar 21, 2015 at 12:03 pm
      No allocation, no bidding , then what is the way out. Is the govt trying to punish Jindal in party lines, then its a bad message to industry. After 1 year of uming office BJP count solve the coal allocation , IS our new priminister a party to all this. Acha din to abi tak aya nahi bai
      Reply
      1. A
        Abhi
        Mar 21, 2015 at 2:57 pm
        Government is taking unfair decision on coal block. As they were the one who decided base price and anything above that in a fair bidding process should be accepted. Not a good decision to cancel the awarded blocks.Its like punishing someone else for own mistake.
        Reply
        1. A
          AJAY KUMAR
          Mar 21, 2015 at 3:42 pm
          IT IS WORST DECISION BY GOVT OF INDIA AND TOTALLY UNFAIR DECISION.
          Reply
          1. B
            BABASAHEB HUBLI
            Mar 21, 2015 at 7:28 pm
            behind JSPL PURPOSEFUL ACT
            Reply
            1. Chandrakant Marathe
              Mar 21, 2015 at 12:31 pm
              The low bids is the result of cartelization. Government of India should rais the minimum price bar to avoid cartelization.
              Reply
              1. M
                Mangoman
                Mar 21, 2015 at 10:24 am
                Wise decision! The Gare Palma blocks were surely not allocated in a fair manner! When the Supreme Court asked miners to pay Rs 295/ton for the windfall benefits that accrued to them, I fail to understand how the govt. decides a base-price of Rs 100/ton!! Anything below Rs 900/ton will smack of corruption (that's not n arbitrary figure)!! Maun-moan couldn't have imagined in 2006 that the coal-blocks will come back to haunt him in 2014!! Similarly, Modi doesn't know if the same blocks will come-back to haunt him in 2019 or later!! Why take a chance?? BTW, I'm upset to see Reuters report being published by FE; why not PTI?? Yesterday China blocked Reuters sites in mainland, adding one more name to a list that already contains Bloomberg and WSJ!! These US media companies are de-facto propaa machines for Washington!!! There's a very good reason why Beijing blocked US "tech-companies" like Google, FaceBook and Twitter as well!! CIA/NSA uses those "tech-companies" for sabotage and subversive activities apart from stealing personal data of users!! Guys don't put your commercial interest ahead of national interest like the Jains of Times of India/Economic Times Group!! The Jains are pimps and they would do ANYTHING for money!!
                Reply
                1. M
                  Mangoman
                  Mar 21, 2015 at 9:56 pm
                  No company in the ongoing block auctions have won a mine at a price of Rs 108/ton!! Don't tell me the coal at Gare Palma 2 and 3 are the worst quality among all the mines auctioned till date (coals are probably broadly categorised in four categories depending upon carbon content)!! The govt. can very well tell the grade of coal available in different mines...that'd end the controversy!! Then we would know if the Jindals were trying to gain undue benefits!!
                  Reply
                  1. S
                    Seelan
                    Mar 21, 2015 at 4:51 pm
                    Are they reserved them for the most dirty & corrupt in our country?
                    Reply
                    1. k
                      kanodiark@rediffmail
                      Mar 21, 2015 at 5:06 pm
                      Where is the fairness,,.... FOr wich the Govt is drum beating in all public shows...
                      Reply
                      1. H
                        Hindustan
                        Mar 21, 2015 at 3:05 pm
                        Is the Govt. doing cartelisation or The Jindal had done that, not very difficult to understand. The price quoted was above the minimum base price. If the Govt. now feels it should get more then why the base minimum price was kept low? Now the compeive bidder was "Adani", more economic and politically stronger than Adani. Why he should withdrew from the bidding? Modi jee can always ask his friend. Modi jee first penalised DLF, then Birlas and now Jindals. Is this a democracy? Now, it is being told that coal mines will be given to Coal India and not re-auctioned. Is the Govt. trying to tell Jindals to close their Power Plants and Steel Plants and go to some other country?
                        Reply
                        1. M
                          manu verma
                          Mar 21, 2015 at 11:21 pm
                          Hi, This is a very bad move from the government. This shows that government can go to any extend to take revenge against people who do praise it or ociated with opposition party. First of all auctions was done by a government agency. Secondly Adani a company know near to Modi was also part of this specific block auction in which JSPL won. Two scenarios 1). If there is a cartilization when why has no one been arrested till now. Why action has not been taken against Adani or JSPL team partirting in the auction or why any cartilization not busted in public. Answer is government does not want any thing like this and want to play safe and stubborn. 2). And if there is no cartilization then should we believe that adani missed giving a higher price for a under priced item. Sorry i can not believe this as Adani can never do such a big mistake. 3). A bid is on a minimum reserved price. Why government kept the price so low, should we expect that government thinks price would be many many times of reserved price. If government was thinking this then they do not know what is a good minimum price they should be asking. Government took a easy step of wrongly cancelling block of JSPL and another small block of another company. This all is a dangerous sign of dictatorship of Modi government. Message is simple either believe us/obey us else we can even cancel something that you have won in a government auction. Shame on this BJP government
                          Reply
                          1. S
                            Samar
                            Mar 21, 2015 at 2:42 pm
                            Shame on gov
                            Reply
                            1. T
                              tr padala
                              Mar 22, 2015 at 8:01 am
                              Government has taken correct decision in the national interestfluntial people robbed this country when in power and when not in power.Some business houses does not command any respect from the people.People have laid aspersons on Former CAG, who has done immence good to our nation whch is evident from the proceed accruing to the govt. in this auction.The word corruption is vanishing, our country commands respect in the world.God bless the leadership.JAIHIND.
                              Reply
                              1. V
                                vcs
                                Mar 21, 2015 at 1:02 pm
                                biggest mistake the government is doing? the government approach is like i like your face, you get allotment, if not what ever you wont get, there will not be any success. government is ready to sell the resources to foreigners, but they doubt the sincerity of Indians who want to develop India. but I feel truth will prevail.
                                Reply
                                1. V
                                  Vikas
                                  Mar 21, 2015 at 7:44 pm
                                  shame on all who r criticizing govt decision of cancellation, if govt suspects companies have fixed deal with each other that for any block, all other will withdraw leaving only one in race for that particular block, and in this way they can separately get blocks on very low bids, then cancelling that block proves govt firm stand against corruption, I believe all who are commenting against cancellation are in favour of companies suspected fraud.
                                  Reply
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