Jindal Power expressed surprise on Saturday as the government decided against accepting its bids, along with that of Balco, for four coal blocks, while deciding to go ahead with five others put to scrutiny after two rounds of e-auctions for 33 mines.
The bids for five other blocks that were re-examined got a go ahead.
"Government takes decision on bids for nine coal blocks after examination. Bids for five blocks accepted," Coal Secretary Anil Swarup tweeted. Bids for Gare Palma 4/1, 4/2, 4/3 and Tara coal blocks not accepted," he said, referring to the four blocks.
Jindal Power had made the highest bid for Tara coal block that was on the table during the March auction, while Balco did so for Gare Palma 4/1 during February. Jindal Power was also the highest bidder for Gare Palma 4/2 and 4/3 blocks. All these blocks are in Chhattisgarh.
Five of the nine blocks that were examined belong to the Schedule III category that are near operational, while the four others are listed under Schedule II that were already operational, according to a coal ministry official.
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Reacting to the decision, Jindal Power said it failed to understand the reason for rejection that "the highest bidder doesn't reflect fair value" and further that it had followed a consistent and prudent bidding strategy throughout the auction process as a serious long term player.
"We are puzzled with the decision and would make our best efforts to engage in a dialogue with the coal ministry and government authorities to present the facts," the company said in a statement.
The coal ministry official said they considered whether these bids were too low when compared with the winning bids for other similar blocks via an analytical tool called "outlier" that looked for unusual patterns that are far removed from the mass of data.
"Not making any allegation of cartelisation as of now," Secretary Swarup had tweeted following the decision on examination, and told reporters later: "We are looking at whether the price that was quoted is good enough for the government or not, and whether we could get a better price".
Listing the options before the government, should the bids be rejected, he said the government could re-auction the mines, allot them to the states or even hand them over to the state-run Coal India.
