Coal India Ltd’s forward e-auction is facing opposition from its own subsidiary, Bharat Coking Coal Ltd (BCCL). The CIL arm contends a forward e–auction is not a transparent transaction.
The coal ministry recently convened a meeting with companies to take their views on the subject. BCCL raised issues concerning implementation of e-auction. The ministry is of the view that while the procedure for spot e-auctions had stabilised, forward e-auctions were yet to do so. Forward e-auction, involving sale of coal through auctioning over a specified period of time, was launched in mid-2009.
Forward e-auction was not popular among coal companies due to certain rigidities in pricing and sourcing. BCCL executives said coal linkage bidders and end-consumers want a different brand of coal as well. The ministry wants to promote forward auction and another round of review would be held in July. “CIL is already in the process of reviewing the working of forward e-auction and has initiated certain steps to remove irritants coming in the way of forward e–auction and we are hoping that in the coming days it will become more popular,” said Partha Bhattacharya, chairman, CIL, during last week’s meeting.
CIL has also decided to review the existing reserve price in order to ensure the reserve price does not act as a deterrent or impede the supply of coal through the forward e-auction channel.
The coal ministry has also asked the companies to refund the value of coal within seven days of expiry of the due date. A delay beyond this would lead to payment of interest to the coal bidder. “This has been done following BCCL’s objection to the delay in refunds to the concerned bidder. This, it felt, was due the non-transparency of e-auction,” said an official from the ministry of coal.
