The auction would be conducted in two rounds for choosing the ‘preferred bidder’
Proffering production-linked revenue sharing model for allocation of mines containing major minerals other than coal, the government on Wednesday came out with the draft rules for mineral auction that would be conducted in two rounds for choosing the “preferred bidder”.
The process would be an ascending forward electronic auction in two rounds. In the first, the bidders will submit a technical bid documenting eligibility and an initial price offer which must be greater than the reserve price in the tender document. The highest initial offer submitted by a technically qualified bidder shall be the floor price for the second round of auction, according to the draft rules.
In the second round, the qualified bidders will have to submit their final price offers which shall be a per cent of revenue and which must be greater than the floor price. The final offer may be revised till the conclusion of the auction in accordance with the technical specification of the auction platform.
“The qualified bidder which submits the highest final offer shall be declared as the preferred bidder immediately on conclusion of the auction,” seeking comments from the states and other stakeholders by April 23, the draft rules uploaded in the mines ministry’s website, said.
The consultation process starts after the Parliament passed the Mines and Minerals (Development and Regulation) Amendment Act, 2015 that replaces an over 55 years old of Act of the same name. The new legislation mandates the Centre to draft rules that would be followed by the states for auctioning of all minerals.
Under the proposed rules, states shall use production-linked revenue sharing model under which the bidders shall quote a percent of revenue as the bidding parameter.