The Comptroller and Auditor General's (CAG) report on the first two tranches of e-auction of coal mines, which was tabled in the Parliament on Tuesday...
The Comptroller and Auditor General’s (CAG) report on the first two tranches of e-auction of coal mines, which was tabled in the Parliament on Tuesday, has questioned whether the government’s move of allowing individual companies as well as their joint ventures to bid for the same mine in the auction was ideal for introducing competition.
According to it, this led to multiple bids by corporate groups through joint ventures or subsidiaries, thus raising question marks over the potential level of competition. It said that in 11 out of 29 coal mines successfully e-auctioned inthe first and second tranches, a number of qualified bidders in the e-auction stage were from the same company/parent, subsidiary company or coalition/joint venture (JV). In the third tranche, the coal ministry amended the clause of JV participation with the objective of increasing participation.
The report has also noted that the coal ministry had failed to provide any broad guidelines under which it had refused to recognise the winning bids as successful bidders. After the first two rounds of e-auction, the nominated authority was asked to evaluate the bids related to eight mines.
Although the nominated authority in charge of e-auction of coal blocks submitted that there was no conclusive evidence of collusion or cartelisation, the ministry of coal decided to issue vesting order for only five of these mines. The winning bids in three mines, two won by Jindal Power and one by Balco, were rejected by the ministry.