Coal news and updates

Multiple bids by corporate groups made through joint ventures or group arms may have limited the competition for 11 coal mines auctioned in the first two rounds in March 2015, according to the federal auditor's report on the first e-auction+ of natural resources conducted by the Modi government. The auction was conducted after the Supreme Court cancelled allotment of 204 blocks in 2014.

The Comptroller and Auditor General's (CAG) report+ , likely to be tabled in Parliament on Tuesday, supports the suspicion that the government itself had developed after the first two rounds of bidding, prompting the coal ministry to put up firewalls against the probability of price-rigging or cartelisation from then on.

TOI had on May 18, 2015, first reported that the government was looking at barring multiple bids by any corporate group to curtail the probability of price rigging or cartelisation, which the coal ministry then believed had led to wide variation in the winning bids — described as "outliers" — in the first round of mine auctions for power plants. These outliers had prompted the ministry to put under the scanner bids for several blocks and finally reject the winning bid of Naveen Jindal group firm for Gare Palma IV/2&3 blocks, as was first reported by TOI.

"Those who have bid multiple, if they had requirement for two units which together fit into the total capacity of a mine, I could have understood. But, those whose one unit needed the whole mine and they still bid multiple, I have actually raised questions about their integrity," coal and power minister Piyush Goyal had told TOI on May 18, 2015.

In the second round of auctions, for example, the Vedanta Group had put in 25 bids for 14 out of 23 producing blocks that were being auctioned. The Aditya Birla Group put in 15 bids for eight blocks. Jindal Steel and Power, which was hit the most when the apex court cancelled allocation of blocks, put in 13 bids for six blocks.

The CAG report says the limit on the number of qualifying bidders — through the process of elimination — while allowing participation of joint ventures and subsidiaries in the bidding did not elicit confidence that the potential level of competition was achieved in the second stage of bidding.

The government has auctioned 34 coal blocks through transparent e-auction, which is estimated to generate Rs 2.85 lakh crore over 30 years for mine-bearing states. But more than a year after they were auctioned, mining has started in only about 10 odd blocks, while the rest are caught in legal or procedural tangles.

Source:TOI