Jindal and Balco bids for coal mines rejected

Speculation of cartlisation during auction process

GN Staff | March 21, 2015


#coal auction   #jindal steel  

The government has rejected bids for four of 33 coal mines put up for auction in the past two months.
Those whose bids have been rejected are Jindal Steel and Power Ltd (JSPL) and Balco, amid speculation of cartelisation during the auction of coal blocks.

Out of the nine blocks, which were examined by the coal ministry for low bids that were termed as “outliers”, the government has accepted five.
“Bids for Gare Palma IV/1, IV/2, IV/3 and Tara coal blocks not accepted,” coal secretary Anil Swarup tweeted.

Talking to Governance Now earlier, coal secretary Swarup had said, “There are nine cases where bids are being re-examined. No one has questioned the process as such. When bids came to us we found that there were certain 'outliers'. There were some bids outside the trend. And we want to understand the reason for that.”

The government can now auction these blocks again, give them back to Coal India or give them to the states.
Jindal Power had emerged as successful bidder for Gare IV/2, Gare Palma IV/3 and Tara Coal blocks while Bharat Aluminium Company(Balco) had emerged as successful bidder for Gare Palma IV/1 coal block.

However, bids for five blocks have been accepted, Swarup tweeted.

Swarup had earlier insisted that the government wasn’t looking at cartelisation aspect at the moment.

There had been reports that some bidders could have indulged in cartelisation to keep the prices low for the concerned mines.
“In the schedule II, we were looking at four mines and in schedule III we are looking at five mines...Prima facie we found that it requires a re-examination, so it has been re-examined that is about all,” Swarup had earlier said.

The coal blocks which did not figure in the list of successful bidders of schedule III mines (ready to produce) were Brinda and Sasai mine (one bid was invited for both the mines), Meral mine, Dumri mine, Tara mine and Mandla South mine.

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