Though a government-appointed panel has absolved the companies concerned of any wrongdoing for three mines that were bagged by them in the first round of coal auctions, the government could still go ahead and put the blocks up for auction again.
According to government sources, the coal ministry has been vested with the power to conduct re-auction of any mine if it feels that the price derived from the bids is not its right value. The way it would conclude this is by comparing the price with similar mines in the region.
The coal ministry had appointed a committee to look into whether there was any wrongdoing by the parties while bidding when questions were raised that the mines were sold at a lesser value.
The coal blocks in question are Gare Palma IV/1, Gare Palma IV/2 & 3 and Marki Mangli III. Balco had bagged Gare Palma IV/1 with a bid of R1,585 a tonne. Jindal Power, a subsidiary of Jindal Steel and Power, had retained its previously held mines Gare Palma IV/2 & 3, which constitute one block, at R108 a tonne. Its winning bid was the lowest among blocks earmarked for the power sector, which ranged from R108 per tonne to R1,110 a tonne. Similarly, the Marki Mangli III block won by BS Ispat had the lowest winning bid price of R918 per tonne among the blocks reserved for the unregulated sector, which ranged from R918 to R3,502 a tonne.
“The government has the authority to go for re-auction if our analysis suggests that a particular block has failed to receive its deserved value.
Without casting aspersion of manipulation or wrongdoing on any of the companies involved, we can choose to go for another round of auction for such blocks to realise its true value,” a highly placed coal ministry source told FE. A final decision will be taken based on the report by the end of this week, he added.
Sources have told FE that the nominated authority has prepared a report on the bidding process declaring that there was no wrongdoing by the companies that bagged these mines. The government is, however, yet to receive the report and a decision on the blocks is expected to be taken by the end of this week.
A decision either way could have an impact on schedule III blocks (near-operational) that attracted lower prices compared with other blocks in the same category. For instance, Jindal Power bagged the Tara coal mine last week with a bid of Rs 126 per tonne, which is slightly higher than the Rs 108 per tonne bid for Gare Palma IV/2 & 3 won by the same company in the first phase of auction that featured operational coal blocks.
For blocks reserved for the power sector among the schedule III mines, the successful bid prices were in the range of Rs 128 a tonne to Rs 770 a tonne.
Of the three blocks, Gare Palma IV/2 & 3 is the biggest block among those reserved for the power sector, with extractable reserves of 155.49 million tonnes (mt), while Gare Palma IV/1 and Marki Mangli III have extractable reserves of 49.57 mt and 3.58 mt, respectively.