NEW DELHI: The government is likely to take a call by Friday on three coal blocks that have been auctioned but their award has been put on hold, even as industry criticised the move to review the sale done through an auction process.
Coal Secretary Anil Swarup on Wednesday said a decision on the fate of three of the eight auctioned blocks being examined by the government will come by March 20. These three were auctioned in the first round.
The government has held award of eight coal blocks for which companies like Jindal Steel & Power, Hindalco Industries, Bharat Aluminium Company and Jaypee Cement emerged as the top bidders. It had cited low price bids for these blocks in comparison with other auctioned assets for the move.
Industry associations on Wednesday wrote letters to coal minister Piyush Goyal and Swarup, expressing concerns that the review would impact the entire coal block auction. Assocham said the review of the auction process was surprising as the government has maintained that the prices have been discovered trough transparent e-auction system.
“Assocham views this development as a regressive step and feels that unfair treatment is being meted out to industry members who have contested fairly and in good faith,” it said. This delay in awarding the coal blocks is causing uncertainty in the industry and is a grave concern for investors, it wrote. “It is also giving vested forces an opportunity to question the transparency and justness of the auction process,” Assocham said.
“Revisiting bidding process will create trust deficit between industry and government. Any instance of reversing the e-auction process will impact business sentiment,” a Ficci tweet read. The Coal-Based Power Producers Association called the examination of bids a “regressive step” and “unfair treatment”. In its letter to Goyal, the association said winning prices for blocks were not low but competitive. It also said that each coal block was different and its bidding depended on various factors like reserves, mining cost, location of end-use plants and coal transportation facility.
The blocks being reviewed include three operational mines -Gare Palma IV2&3 bagged by Jindal Steel & Power, Gare Palma IV5 bagged by Balco and Marki Mangli III won by BS Ispat. The other five are non-producing coalmines for which Jindal Power, Hindalco, Tirumala Industries, Jaypee Cement and Usha Martin emerged as the winning bidders.
