After the successful completion of first phase of Coal block auction with 33 captive blocks, now the ministry is to start second phase of Coal block auction with the new bidding rule which suggested: ‘count one bid by one company’.
Currently the Indian Coal Ministry is preparing for the second phase of block auction & allotment and expected to offer 35 captive coal blocks in the next phase very soon. The Ministry is looking to tighten up the process with a new rule which may select a particular company or group to make only one bid for one mine. On the other hand, if any company makes multiple bids for a particular mine, in that case ministry will count the best one out of them.
In prior auction methodology, one group was allowed to make multiple bids for a mine and all bids were counted in the final list. In phase one, many companies such as JSPL, Aditya Birla Group, Sesa Sterlite, Adani Power etc. had followed the approach of making multiple bids for one mine.
The Ministry is examining all possible aspects of auction methodology to ensure no misuse of bidding norms in the next phase. In the upcoming auction, only one bid from one group will be counted by the government.
In the previous mine auctions, bids were made in two rounds conducted by the ministry- in the first technical round, bidders were required to make an initial price offer and after that, in the second round, only 50% of those who qualified or top five were allowed to participate in the second round of financial bidding. This rule resulted in limiting the competition as all bids put by the same company were directly counted in final top 50% bidders.
Now, one bid count by one company will open up the field for others too and all bidders will have an equal chance of winning their desired mine.
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