Delhi HC allows more bidders in coal mine auction

By: | Updated: February 14, 2015 1:55 AM

The companies that got the relief are Sesa Sterlite, a part of the London-listed Vedanta Resources, Raipur-headquarterd Sarda Energy and Minerals, and Delhi-based Usha Martin.

Supreme Court, Coal blocks, Coal ordinanceAccording to the government, Sesa had not uploaded the statutory auditors? certificate for its captive power plants. (Reuters)

A day before financial bidding for the coal blocks cancelled by the Supreme Court was to commence, potential bidders and those left out continued to get favourable court orders, forcing the government to allow more companies to bid for some blocks. Earlier, thanks to adverse court orders, the government was made to withdraw five mines out of 110 initially on the auction platform till a designated technical panel completed a review of their specified end uses.

On Friday, the Delhi High Court allowed three companies to bid for blocks they had been barred from participating in during the technical round, citing discrepancies in their applications such as failure to upload the relevant documents in time. The companies that got the relief are Sesa Sterlite, a part of the London-listed Vedanta Resources, Raipur-headquarterd Sarda Energy and Minerals, and Delhi-based Usha Martin.

Allowing the Anil Agarwal-controlled Sesa Sterline to bid for six blocks — Gare Palma IV/1, IV/4, IV/5, IV/7 and Chotia in Chhattisgarh and Kathautia in Jharkhand — a bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva said: “Let bids of Sesa Sterlite be considered in the facts and circumstances of the case.” The court, which allowed the other five companies’ plea on similar grounds, also said: “Can’t understand what is happening with this coal auction.”

When contacted, coal secretary Anil Swarup said the court orders won’t jeopardise the auction process, adding that Sial Ghoghri and Talabira -I would be auctioned off on Saturday as scheduled. The court order only allows more players to participate in the auction process of

specific mines, which would help enhance competition, he added.
According to the government, Sesa had not uploaded the statutory auditors’ certificate for its captive power plants. However, the company, represented by senior advocate Kapil Sibal, said it had uploaded the correct statutory auditors certificate with respect to its 135-megawatt captive power plants, but the government mistook it for the certificate of its 600-megawatt independent power plant.

Additional solicitor general (ASG) Sanjay Jain and advocate Akshay Makhija, appearing for the coal ministry, said a clarification was sought from Sesa regarding its certificate, but the company has not provided any documents till date.

As reported earlier, the government on Thursday shortlisted 134 technically qualified bids among the 176 it received for the 20-odd producing coal blocks that it hopes to auction off by next week.

The Madhya Pradesh High Court had ordered 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. Earlier, the Delhi HC had 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 Shedule-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 the bidding platform, citing a single-bid scenario, the number of blocks taken out from the first phase of the auction process thus became 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.

Monet Ispat, Utkal and Jayaswal Neco also challenged the two-phased auction procedure in which 50% of bidders are eliminated after the first round. While in the case of blocks with power generation as the end use reverse bidding will take place, for unregulated end uses like steel, sponge iron, etc, the highest bidder will qualify.

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