Coal block auction: Next phase to await Delhi HC decision; hearing today

Coal ministry puts on hold announcement of qualified bidders after court asks govt to mull postponement of auction

The ministry of coal has put on hold the announcement of qualified bidders for mines ready to start production, after the high court here asked the government to look into the possibility of postponement of the auction.

Technical bids came from 131 applicants for 19 blocks on February 15. Those which qualified were to be selected and announced, along with opening of initial price offers for the e-auction starting Wednesday.

The HC directive came on a petition from Sarda Energy & Minerals, for the upcoming phase of the e-auction of blocks in Schedule III, which are about-to-produce mines. Sources said the procedures for e-auction were taking place as planned but the public disclosure would be done only after the HC gave clarity on the matter. The next hearing is on Tuesday, wherein the court would hear the arguments over the Coal Mines (Special Provisions) Ordinance.

The ordinance was promulgated to re-allocate the 204 blocks cancelled by Supreme Court order in August 2014. Sarda Energy's petition asks for scrapping of the ‘initial offer price (IPO)’ stage of the bidding in the new  auction methodology. The company has asked that there be only two rounds, technical and financial, in the bidding. And, that the government not select the top five bidders on the basis of the IPO filed with the technical submissions.

“The ministry was asked by the Delhi HC to see if they can wait till the court gets clarity on the provisions of the coal ordinance. The ministry will abide by it. It’s anyway a matter of just one day. There won’t be any delay, as back-end proceedings are going on; only public announcements are not being made,” said a senior ministry official, requesting anonymity.

A company to be eligible to bid for a Schedule III mine shall have incurred an expenditure of not less than 60 per cent of the total project cost of the unit or phase of the specified end-use plant for which the company is bidding.

“The company has submitted that the ordinance does not allow the government to select bidders based on IPO. However, the ministry has made its stand clear that the ordinance allows the government to decide the methodology for the auction,” said a senior government official.

By the bid rules, companies must give technical bids, which are then evaluated. The top five technically qualified bidders, on the basis of their IPO, go ahead and bid in the e-auction. The auction for 18 blocks in the first phase concluded on Sunday.