‘No cartelisation but bids low for 2 blocks’https://indianexpress.com/article/business/business-others/no-cartelisation-but-bids-low-for-2-blocks/

‘No cartelisation but bids low for 2 blocks’

No proof of collusive bidding, says Coal Ministry arm.

The coal ministry on Tuesday justified that it never made out a case of cartelisation in bids for two coal blocks Gare Palma IV/2 and IV/3 auctioned recently, but certain observations by its arm in its evaluation report for these mines said the bids could have been at a “higher price.”

The nominated authority (NA), which had overseen the auction process and was entrusted to give its views on these two blocks, had witnessed low bids and the blocks were thereafter rejected by the ministry on March 20.

In the report the NA has said there is “no conclusive proof regarding collusive bidding, nor has received any complaint on e-auction platform obstructing submission of bids nor were there any procedural infirmities in the auction process.” Arguing that these blocks witnessed ‘comparatively low bids’, the coal ministry has not issued a vesting order to Jindal Power Limited, which had won them.

The NA has argued that while bids for the power sector mines were aggressive and 115 to 264 bids were received for other blocks, but these two mines received only one bid. “It is not understood why other qualified bidders did not bid for this mine?” Arguing further it said while smaller mines in terms of extractable reserves have fetched higher prices, Gare Palma IV/2 and IV/3 having the maximum reserves (246.84 MT) has been bid for the lowest amount. “It would be reasonable to expect a higher bid price,” the authority has pointed out.

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Jindal Steel and Power (JSPL) had moved the Delhi High Court court on March 21, challenging the government decision of not issuing the vesting order to it for these mines. The court in its observations last week said there was no case of cartelisation and has appointed Coal India as the designated custodian of these blocks as an interim measure.

A senior coal ministry official said the government never viewed any cartelisation in bidding of these blocks . But there is reasonable evidence that it did not receive fair value for them and has reasonable conviction in saying so.

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