Coal auction: 44 bids rejected; ex-owners, sector biggies ahead

Out of these, top 50% of the bids or top 5 bidders, whichever is less would go ahead for the final round of e-auction starting Feb 14

The government on Thursday announced 'technically' qualified bidders for the 23 coal blocks put for the electronic auction to commence from Saturday, disqualifying 44 of the 178 bids received.

Out of these, top 50 per cent of the bids or top 5 bidders, whichever is less would go ahead for the final round of e-auction starting February 14. The nominated authority for the coal e-auction would open the financial bids on Saturday to select the e-auction participants. The low initial price offer (IPOs) would stand selected for bidding in coal blocks for power, whereas for the unregulated - steel, cement and captive power, the higher IPOs would be selected.

The upcoming e-auction would witness the sector majors fight it out with the prior owners. The latter - of the likes of Jindal Steel & Power, Hindalco Industries, GVK Power, BLA Industries and so on - have had none of their bids disqualified.

For the blocks it had lost, Jindal Steel has given more than one bid. So has the Birla group's Hindalco. Both companies have been the subject of prosecution inquiry in the associated scam on earlier allocations.

Comparatively smaller entrants such as Indrajit Power, Sanvijay Engineering and Sarda Energy, marred in legal controversy, have lost in the race.

  "The modality involved in the auction is such that in a way it largely favours the prior owners. The former operators would have the on-ground information of the mine and end-use and, hence, would have an upper hand at any point of the proceedings," said a Delhi-based analyst in the power sector.

The bids were evaluated by a multi-disciplinary 'technical evaluation committee'. In the detailed tender document, separate for each mine, the bidders had to give details on end-usage of the coal, amount needed and distance of end-use plant from the mine and completion status.

As specified by the ordinance in this regard, for a company to be eligible to bid for any operational mine, it should have invested at least 80 per cent of the total project cost of the unit or phase of the specified end-use plant for which the bid is being made.