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Coal block re-examination dangles on five bidders

Five successful bidders of captive coal blocks wait with bated breath as Union coal ministry officials say that the government reserves the right to have a re-look at coal block auctions to draw in more value from them.

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Five successful bidders of captive coal blocks wait with bated breath as Union coal ministry officials say that the government reserves the right to have a re-look at coal block auctions to draw in more value from them.

Last week, the ministry released names of only eight out of 13 successful bidders. It withheld the name of other five winning bidders, namely, Hindalco, Jindal Steel & Power Ltd, Usha Martin and Tirumala Industries.

Coal secretary Anil Swarup told dna: “A re-examination is underway with regards to the bidding process of certain coal blocks. The issue is under due consideration.’’ Swarup refused to comment on allegations of cartelisation, saying that “it is an internal process, which is yet to be finished. I won’t like to comment.’’

The coal blocks bids won by these companies are under re-examination, as the winning bid prices were only slightly higher than the reserve price. Of the five coal blocks, JSPL had won the Gare Palma IV 2/3 block as captive mines for power, while the rest of the blocks belonged to unregulated sector. The Gare Palm IV 2/3 coal block as 155.49 million tonne of extractable reserves. The Tara coal block won by JSPL is also under re-examination.

A final decision on their fate would be taken by this weekend.

The options that could be explored for these mines, after 're-examination' of the bids, would include a fresh auction for those mines, allotting them to the state or giving those blocks to state-run Coal India, Coal Secretary Anil Swarup said.

"By this weekend there would be a decision on the nine coal blocks which are being re-examined by the government," Swarup told PTI.

Asked if there is a possibility that government can go for re-auctioning of these blocks, Swarup said: "Anything can happen."

On allegations of cartelisation, ministry sources say that the re-examination of coal blocks should be necessarily seen in a negative light. Some most productive coal blocks have fetched less revenue in some bids and thus the review may look at drawing in added value on them.

JSPL spokesperson said: “JSPL has not received any communication from the government with regard to the issue of re-examination of the recent coal block allocations to JPL. The recent coal block auctions were conducted through a transparent & fair bidding mechanism and as per the MSTC website JPL was the winning bidder with regard to the above mentioned coal blocks.’’

Meanwhile, industry sources said a bidder winning an auction cannot be challenged just because the price discovery is perceived to be low. The bidders have complied with all the processes required and the allotment cannot be withheld arbitrarily on the premise that the bid was relatively lower.

The coal ministry has carried out e-auction of 33 coal mines/blocks and an estimated revenue of Rs 2 lakh crore is likely to be generated from the process, Coal Minister Piyush Goyal had informed the Lok Sabha last week.

 

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