Coal block auctions: Initial response positive, 69 firms purchase the tender documents priced at Rs 5 lakh

By: | Published: November 29, 2018 5:13 AM

After the failure of last two tranches of coal-block auctions, the coal ministry has received “overwhelming” response for the latest invitations for 19 captive mined.

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After the failure of last two tranches of coal-block auctions, the coal ministry has received “overwhelming” response for the latest invitations for 19 captive mined. A senior coal ministry official told FE that “as many as 69 companies have purchased the tender documents priced at `5 lakh”. The last two auction-tranches for the coal blocks, where 15 mines were offered, had to be cancelled as they could not even elicit three bidders to participate.

The official attributed the positive reaction from the industry to the changes incorporated in the auction terms, such as, allowing private companies to sell up to 25% of production from the captive mines in the open market. “There are 11 mines which more than three parties want to bid for,” the person said.

To regain the interest of private players, the tender terms were amended as per the recommendations of the high power expert committee formed under the chairmanship of former chief vigilance commissioner Pratyush Sinha.

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After the Supreme Court, in 2014, cancelled 204 coal mines allocated to various government and private companies since 1993, 89 coal mines (53 PSU allotment, 31 auction) were successfully allocated for captive consumption for power and non-regulated sectors (steel, cement, fertilisers) through the Coal Mines (Special Provisions) Act, 2015. Out of these, agreements have been terminated for five auctioned mines.

Industry sources have attributed the complexities related to procuring environmental and forest clearances to begin coal mining as a major impediment to private participation in the auctions. The last date for receiving final bids for the auctions have been extended to December 16. The ministry official attributed the postponement to the requests from some companies who wanted more time to visit the coal mines and make financial arrangements.

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