1. Coal mine auction hits another judicial block

Coal mine auction hits another judicial block

Madhya Pradesh HC pulls out two more mines; total now six

By: | New Delhi | Updated: February 13, 2015 2:32 AM
Coal India, Coal India stake sale, Coal India shares, Coal India BSE, Coal India NSE, Coal India news, Coal ministry

The Madhya Pradesh High Court has ordered the removal of two of these blocks — Gotitoria East and Gotitoria West — from the auction platform, giving interim relief to BLA Industries, the previous allottee that challenged the change of end use of the blocks. (Reuters)

Even as the government on Thursday shortlisted 134 technically qualified bids among the 176 it received for the 20-odd producing coal blocks it hopes to auction off by next week, judicial orders continued to affect the process. The Madhya Pradesh High Court has ordered the removal of two of these blocks — Gotitoria East and Gotitoria West — from the auction platform, giving interim relief to BLA Industries, the previous allottee that challenged the change of end use of the blocks.

As reported by FE earlier, the Delhi High Court on Wednesday asked the government to review change of end use for three mines — Gare Palma IV/6, Utkal B1 and Utkal B2 — previously held by Jindal Steel and Power (JSPL), prompting the government to withdraw these schedule III blocks (about to start production) from the auction process and refer them to the technical committee that decides on the end use. Given that earlier the government took out Parbatpur Central mine, a producing one, from bidding citing a single-bid scenario, the number of blocks taken out from the first phase of the auction process has now risen to six.

These apart, a clutch of cases are pending with courts as previous holders of the blocks contested the compensation amounts fixed by the government in lieu of the mine infrastructure they had created at various sites as being too low.

graph-coal

BLA Industries, which previously held the Gotitoria mines, had petitioned the high court against the change of end use to the unregulated sector, arguing that the mines should be reserved for the power sector.

“Consequent to an interim order of Jabalpur (High Court), the auction of two mines has been put on hold in schedule II category (producing mines). These are Gotitoria East and Gotitoria West,” coal secretary Anil Swarup said in a press briefing, adding that pursuant to the order, the ministry will study the case in detail.

The coal secretary also said that operating mines that do not get reallocated for various reasons by March 2015 will be handed over to a ‘custodian’ so that there is no production loss in those mines. The composition and nature of custodian was being discussed and a final structure will be decided upon in a couple of days, he said.

The government has received eight bids for Gotitoria East and Gotitoria West mines in Madhya Pradesh from companies like ACC, BLA Power, BS Ispat, Godawari Power and Ispat, OCL Iron and Steel, Prism Cement, Reliance Cement and Trimula Industries.

“There was no restriction on companies on the number of mines they could bid for and if something like this (court order) happens, each stakeholder of the process has to take a hit,” Swarup said when asked whether the last-minute withdrawal of these two mines was unfair on companies that had submitted bids for them.

Of the 134 bidders that qualified in the technical round, 48 belong to the power sector and 86 to unregulated sectors like cement, sponge iron, steel and captive power.

However, as per the rules of auction, only the bidders in the top half of the technically qualified bidders for each mine will participate in the financial bidding round. For instance, in the case of a mine with 10 qualified bidders, only the top five will be allowed to participate in the financial bids, starting from Saturday this week.

The government also announced the addition of nine more blocks for allocation to state-owned utilities, which now takes the number of such mines to 45 and the total tally of mines to be auctioned/allotted to 110 from 101 previously.

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