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  1. E-auction process for 24 coal mines kicks off; Jindal, Hindalco, GVK blocks on phase 1

E-auction process for 24 coal mines kicks off; Jindal, Hindalco, GVK blocks on phase 1

Coal blocks of Jindal Steel and Power (JSPL), Hindalco Industries and GVK Power are among 24 mines set for e-auctioning in the first phase.

By: | New Delhi | Published: December 26, 2014 8:47 AM
Coal auction, Coal block allocation, coal scam, Jindal Steel, Hindalco

There are among the 204 coal mines cancelled by the Supreme Court on September 25, which held their allocation as illegal and arbitrary. (PTI)

Coal blocks of Jindal Steel and Power (JSPL), Hindalco Industries and GVK Power are among the 24 mines set for e-auctioning in the first phase for which registrations opened on Thursday.

State-run MSTC, which has offered its platform for conducting the e-auction, has put out a list that included Gare Palma IV/1, IV/2, IV/3 and IV/6 blocks in Chhattisgarh hitherto belonging to JSPL, Talabira-1 of Hindalco in Orissa and Gare Palma IV/5 belonging to Monnet Ispat and Energy in Chhattisgarh. These blocks are among the 204 mines cancelled by the Supreme Court on September 25 which held their allocation as illegal and arbitrary.

“It is a very transparent and fair process as auctions are being conducted online and eligible companies can submit their techno-commercial bids hassle free,” said coal secretary, Anil Swarup.

The mines to be auctioned in the first and second phases are the ones currently operational and are understood to be free of encumbrances. Another block, Marki Mangli-II in Maharashtra, which was to be e-auctioned has been taken off the list as the union environment ministry has said that it is situated in an inviolate area.

The e-auction for qualified bidders will be held during February14-22, 2015. Once the companies win their bids, the mine allocation process will be completed by March 23, 2015 with the signing of Coal Mine Development and Production Agreement and the vesting order.  Last date for receiving technical bids is January 31 and list of qualified bidders will be announced on February 12.

The auction process will comprise techno-commercial bid for qualification and financial bid for selection of successful bidders. The coal ministry’s blueprint said, blocks set aside for iron and steel, cement and captive power plants will be auctioned through ascending forward auction methodology where qualified bidders will quote incremental bids above the pre-determined floor price of Rs 150 a tonne. Mines to be allocated for power sector will be auctioned through ‘Descending Reverse Auction’ to minimise impact on power tariffs of end-use plants.

To neutralise cartelisation by big players, Swarup said the government has inserted provisions wherein companies must prove they have invested at least 80 per cent of the total cost on their projects. The rules bar a firm from bidding if it has been “convicted for an offence relating to coal block allocation and sentenced with imprisonment for more than three years”.

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