Coal mine auctions: Ministry will allow mines with less than 3 bidders to go under hammer

Twesh Mishra New Delhi | Updated on October 13, 2019 Published on October 13, 2019

Coal mine auction norms relaxed following tepid response to previous rounds

The Ministry of Coal is going to allow mines with less than three interested bidders to be auctioned in the 11th round of coal mine auctions. This significant move comes after the 8th, 9th and 10th auction rounds saw a poor response with just six of the 27 mines finding the minimum three bidders required to go under the hammer.

“The decision to allow the auction of mines with just two bidders is in line with the October 2018 recommendations of the Pratyush Sinha committee. This will be implemented in the next (11th) round of coal mine auctions,” a top Coal Ministry official told BusinessLine.

“In all, 45 bids were received for the blocks on offer, but an adequate number of bids were received for just six out of the 27 blocks on offer in the recent (8th, 9th and 10th round) auctions. Another six blocks received interest for allocation to State or Central government entities. In total, 12 of the 42 blocks envisaged to be auctioned or allocated in this round are now in the fray,” the official said.

This August, the Coal Ministry started the process of auctioning 27 coal mines and allocating 15 mines to developers. This process was re-initiated after previous attempts elicited an inadequate response from bidders given poor market conditions. The allocation of blocks was restricted to Central and State PSUs.

A high-power expert committee was constituted in December 2017 under the chairmanship of Pratyush Sinha, former Chief Vigilance Commissioner. The committee — whose members included former SBI chairperson Arundhati Bhattacharya and former Union Bank of India CMD Arun Tiwari — held four meetings.

It was formed after the annulment of the fourth and fifth coal mine auction rounds to non-power firms due to a tepid response.

The committee was tasked with examining the criteria in the coal mine bid system and study their challenges and efficacy. It also examined the difficulties in the fixed bid system and proposed suggestions for change of bid criteria.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on October 13, 2019
This article is closed for comments.
Please Email the Editor