Jindal Steel and Power (JSPL) on Monday moved the Delhi High Court against the Centre rejecting its “winning bids” for the two coal blocks despite the latter’s failure to find any malpractice or collusive bidding in a post-facto scrutiny. The court issued a notice to the Centre and restrained it from handing over the mines to Coal India (CIL) till further orders.
The court’s decision, incidentally, came immediately after the government said it would allocate the two operational blocks, reserved for the power sector, to CIL. The transfer was to take place on March 31.
The coal ministry on Friday cancelled the completed bidding processes for Gare Palma IV/2/ IV/3 and Tara coal blocks in Chhattisgarh wherein JSPL emerged as the successful bidder. It also rejected the bids for Gare Palma IV/1 block, depriving the highest bidder, Vedanta Group’s Balco, of the right to lay hands on it. The government’s rationale for the decisions was that the bidding process ended rather abruptly and that the highest bid prices were lower compared to those received for blocks with similar grades of coal and same end-use.
In its plea, JSPL said it feared the two blocks might be allocated to someone else as the government was “moving very fast”. The matter was mentioned before a bench of justices BD Ahmed and Sanjeev Sachdeva by senior advocate Rajiv Nayar who sought an urgent hearing. The next hearing is slated for March 26.
A government source speaking on condition of anonymity had told FE that the coal ministry had chosen to take a cautious decision in the face of circumstantial (adverse) evidence with regard to bidding process for all the three blocks. “The court can adjudicate if it is appropriate to grant these mines to winning companies,” the source added.
JSPL had managed to win two blocks at the lowest prices in both schedule 2 (functional) and schedule 3 (about-to-produce) blocks for the power sector. The company bagged the operating Gare Palma IV 2 & 3 for Rs 108 per tonne even as the final bid price for blocks in the sector ranged from Rs 108-1,110/tonne.
Similarly, the company grabbed Tara (schedule 3) block for Rs 126 a tonne, while final prices for power blocks ranged from Rs 126-770 per tonne at the end of the auction. As for Gare Palma IV 1 won by Balco at Rs 1,585 per tonne, the price was found to be much lower than adjacent blocks of Gare Palma IV 7, IV 4 and IV 5 that attracted final bids of Rs 2,619, Rs 3,001 and Rs 3,502 a tonne, respectively.
So far, a total of 32 coal blocks have been auctioned in two tranches. While in the first lot 19 coal mines were auctioned that belonged to schedule 2, in the second lot 14 coal blocks from schedule 3 went under the hammer.