Indian government has officially cancelled the upcoming coal blocks auctions, wherein the winners would have been allowed to sell 25% of the production in open market.
The circular passed on MSTC website read as “Pursuant to Clause 5.13 and Clause 9.3.2 (a) of the Tender Document, bidders may kindly note that the 6th Tranche and 7th Tranche of auction stands cancelled.”
The underline clause in the tender document depicts the right to suspend and/ or cancel the tender process without assigning any reasons thereof.
It may be noted that the ministry had extended the schedule of auction process six times before its ultimate cancellation.
Accordingly, the tender process of all the 19 mines offered in the auction stands cancelled.
The cancellation of auction process came just days after Cabinet Committee had approved the methodology for selling coal in open market for captive miners.
Media reports have suggested that there was some discrepancy between the tender documents which had led to the cancellation.
Low Response in Previous Auctions
The current round of cancellation have extended the wait for an successful coal block auction being carried out in recent times.
Earlier, the previous two tranches of coal block auctions had also not garnered fruitful response, which were ultimately terminated.
In the 4th tranche of auction, 9 coal mines were put for auction for the Non-regulated sector i.e. Iron & Steel, Cement and Captive Power Plants. Due to the low response, online bids were not opened and the 4th tranche of auction was annulled.
While in the 5th tranche, 6 coal mines were put for auction for the specified end use “production of Iron & Steel”. As there were less than 3 bidders/technically qualified bidders, the auction was also annulled.
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